OK, the NAR says sales will decrease 8% for 2006. They didn't address how far prices will drop - and even if/when they do, it'll still be a bogus number because they don't take into account incentives.
The NAR put this PR out today to coincide with their deluded testimony to congress. The headline "NAR: Home Prices Expected to Fall for Remainder of 2006" and then they went on to say sales will fall 8%, without predicting the price decline. My bad - I originally saw "prices fall" and thought they predicted an 8% decline.
So, anyone want to guess how far true home prices (reported plus incentives) will fall from the peak this year, since the NAR won't?
Also, anyone notice Tom Stevens, President of the NAR, getting called out on CNBC for having his own home on the market for over a year with no buyer? Ha.
Housing prices are expected to continue to have a limited fall throughout 2006, according to testimony submitted by the National Association of Realtors at today's Senate Banking Committee hearing, titled the Housing Bubble and Its Implications for the Economy. In addition, NAR noted that the sellers' market is transitioning to a buyers' market, which can be healthy for some local economies
NAR forecasts a drop in home sales of around 8 percent in 2006, followed by another 2 percent decline in 2007. These numbers are based on the stabilizing of mortgage rates and modest expansion of the economy. Also predicted is that home price growth will be minimal-less than 3 percent in 2006 and 2007. However, NAR warns that a significant shift in interest rates or a change in the economy would change this forecast. NAR notes that a soft landing is possible under the right circumstances and affordable mortgage financing is an important component in achieving this
September 14, 2006
NAR: Home Prices Expected to Fall for Remainder of 2006
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15 comments:
Beat me to it - year 2006 = 3/4 over.
On 9/7/2006, Keith issued his "Housing Manifesto", declaring that he is "rooting for an epic housing collapse, a disastrous recession, the collapse of the stock market, a complete replacement of our current partisan leadership, a questioning of our country's current economic model, and a severe and historic financial meltdown......Period."
How has the market reacted to his call for change?
9/7/2006: Keith issues "Housing Manifesto"
9/8/2006: 11,392.11 Dow up 60 points
9/11/2006: 11,396.84 Dow up 5 points
9/12/2006: 11,498.09 Dow up 101 points
9/13/2006: 11,543.32 Dow up 45 points
For those playing at home, that is 4 days out of 4 that the market has gone up since Keith rooted for its epic collapse. Oh yeah, Keith's beloved Gold and Oil are in the crapper.
God Bless America
In the 1990 housing recession the Dow went up while housing went down.
Shiller - balloons usually keep getting bigger, right up to the instant when they pop.
Last anon - you are correct......look at Gold and Oil.
Shiller,
>>> For those playing at home, that is 4 days out of 4 that the market has gone up since Keith rooted for its epic collapse. Oh yeah, Keith's beloved Gold and Oil are in the crapper.
Ahhh ...unless you have a crystal ball, isn't it a little too early to prove Keith wrong. 4 days? Please.
But it's always a good time to buy, you know.
Roidy
Why is it that the public cheers when housing prices keep going up, but will get angry if the price of cars were to go up by 300% in 5 years?
Mr. Campbell -
You need a longer time period? Click here and see if this strikes your fancy:
Shiller's Crystal Ball
yea, it's like a week since 9/7
Anon 4:22, people don't get mad when house prices go up 300% because they are chasing a paper phantom. They know that they won't be able to sell their 5-y-o honda civic for 5x what they paid for it...but somebody out there was willing to pay 5x for a house on the BELIEF that somebody else would spend more money.
Quod Erat Demonstratum. Until recently, anyway.
Anon 4:22:49 wrote:
“Why is it that the public cheers when housing prices keep going up, but will get angry if the price of cars were to go up by 300% in 5 years?”
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Has anybody noticed the price of classic cars lately? It’s surprising there haven’t been discussions on this topic, on this blog. These have really jumped in price over the last few years. Any thoughts on whether these may be a good investment?
It may be time to haul my ’66 Sprint Six LeMans out of the barn, clean all the sparrow $hit off of it, and put it up for sale, for three times what I paid for it 5 years ago...
I am also in the old car hobby and prices for old autos and their replacement parts has skyrocketed in the past few years, even more than normal allowing for attrition. God ain't making any more dirt and Chevy ain't making any more 57's!
That coupled with my experiences on Ebay with certain categories of antiques that I collect, lead me to believe that antiques and collectables of all types could be the next bubble market. People are still gun-shy of the stock market, and soon will have the same attitude towards housing as well. They have to do something with all that money burning a hole in their pocket. Saving still isn't in vogue yet!
You may have just nailed the answer to the question - “Why this recent stock market rally?” There are a lot of investors out there looking for a place to put their money. Now that they are no longer putting it into housing, they are now investing in the stock market.
Last time a housing bubble popped where I am (Anaheim, CA, mid-Nineties) we had a 2/3 drop in prices. I lost $30k in that crash.
I expect to have my present mortgage completely paid off before 2008 and can weather an 80% plunge from this bubble's peak. (I won't be happy over 50-60%, but I'll still come out ahead.)
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