Tuesday, April 22, 2008
If Lawrence Yun wanted to be more helpful…
In the National Association of Realtors’ monthly report on existing home sales, where sales fell 2.0 percent in March (now down 19.9 percent on a year-over-year basis) and home prices continued to tumble (down 7.9 percent from a year ago), NAR chief economist Lawrence Yun had the following comments:
Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets. At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.
If Lawrence had wanted to paint a more accurate picture of current conditions, he might have said something like this:
Look, everyone is scared to death right now – lenders, buyers, realtors – never, ever in a million years did we think that prices would drop like this. I mean, who wants to buy a house that is probably going to lose $20,000, $50,000, or $100,000 over the next year? If you can buy a foreclosed property at a steep discount, have it at. Otherwise, stay away.
Here’s the chart:
High inventory + low sales = falling prices.
