Thursday, July 24, 2008
The amount of misdirection coming from the NAR (National Association of Realtors) seems to be inversely correlated with the skittishness exhibited by potential buyers as seen in comments for today's report on existing home sales.
Sales of previously owned homes in the U.S. made a new 10-year low in June, down 2.6 percent from May and almost 16 percent below year ago levels, while inventory poked back above the 11 month mark for the second time in the last three months.
NAR President Richard F. Gaylord noted the reluctance of home buyers, now sitting on the fence, who just may be missing out on their chance to get rich!
A recent online survey of realtors shows nearly a quarter of potential home buyers are waiting on the sidelines. However, timing the market can be very tricky, which is why home buyers should always have a long-term view to build wealth.Loosely translated this means, "You should buy now because, even if your house goes down in value over the next year (maybe two years, possibly as long as three to five years, and, in a worst case scenario, six or eight years), if you look out another 10 or 15 years, you're gonna be rich!"
It's all about "building wealth" - a hot-button phrase that was surely more effective when home prices were rising instead of falling.
Chief Economist Lawrence Yun then uses the freakishly high level of short sales and foreclosures to discredit the 6.1 percent decline in real estate prices while conveniently failing to mention that these transactions have bolstered real estate sales in some areas.
Yun said there is a downward distortion in the price data. “With short sales and foreclosures accounting for approximately one-third of transactions, it’s hard to make an apples-to-apples comparison with a year ago when they were only a minor portion of the market,” he said.Translation: Don't pay any attention to the falling prices because they are driven by distressed sales, but don't pay attention to distressed sales when looking at rising sales volume in certain areas.
Despite the overall sales decline, unpublished snapshot data shows existing-home sales rising significantly from a year ago in Bakersfield, Calif.; Fort Myers, Fla.; and Las Vegas.
“Sales are now beginning to pick up in Orlando, Fla., Phoenix, and Oakland, Calif.,” Yun said. “Interestingly, sales fell in Atlanta, Houston, and Kansas City, Mo., despite affordable home prices and solid local employment conditions.”
Never mind that housing bubble hotspots like Las Vegas are now foreclosure hotspots.
How stupid do they think people are?