Lawrence Yun, the staff economist for the National Association of Realtors who has replaced our favorite whipping boy, David Lereah, as the Man Who Must Be Quoted in all stories about the real estate market, complained that the housing market was "underperforming" given what he considered the general overall health of the economy.
"Psychological factors," he said, explained buyer reluctance to jump into the market at the present time.
How Yun and his ilk are able to cite "psychological factors" as the reason for anything is an exercise in tautological meaninglessness that continues to baffle How the World Works. If you're going to blame consumer psychology when the market is headed down, then in all fairness you should blame it when the market is going up.
"Psychological factors," he said, explained buyer reluctance to jump into the market at the present time.
How Yun and his ilk are able to cite "psychological factors" as the reason for anything is an exercise in tautological meaninglessness that continues to baffle How the World Works. If you're going to blame consumer psychology when the market is headed down, then in all fairness you should blame it when the market is going up.
But back in the go-go days, we never heard anyone from the National Association of Realtors say anything along the lines of: "The real estate market overperformed this month, as home buyers, irrationally convinced that home prices would continue to appreciate beyond all rhyme or reason, stepped up their splurging on new and existing homes, rashly confident that they would be able to sell their purchases at a 25 percent markup in just one year."
Psychological factors are always in play, whether a market is going up or down. We've been giving Yun a chance to establish some street cred, but with each whine about buyer psychology, our willingness to give him the benefit of the doubt takes another hit.
Psychological factors are always in play, whether a market is going up or down. We've been giving Yun a chance to establish some street cred, but with each whine about buyer psychology, our willingness to give him the benefit of the doubt takes another hit.
16 comments:
damn, that was awesome.
Ask LW when is a shill just a shill?
Excellent post; really enjoyed it. You are on fire today. Keep it up.
I'm starting to despise Lawrence Yun every bit as much as I despised David Lereah. I guess I don't have much respect for people who lie and talk out of their ass all the time. Funny how that works.
I guess I suffer from Bi-polar-housing-disorder, I'm sure there will be a Direct to consumer TV spot soon for a new drug.
foreigners are going to take advantage of the dollar plunge and buy up U.S. assets for pennies on the dollar after the collapse. millions will lose their jobs as companies are moved overseas.
Look people, it's nothing a little thorazine won't cure.
There.
See!
"Shiny happy people holding hands..."
Yun looks like he may be part mongoloid.
KB Home reports unexpected loss
Homebuilder puts quarterly operating loss at $174.2 million, says it continues to see deteriorating market conditions.
June 28 2007: 8:44 AM EDT
http://money.cnn.com/2007/06/28/news/companies/kbhome/index.htm?source=yahoo_quote
NEW YORK (CNNMoney.com) -- Homebuilder KB Home has become the latest company in its battered sector to report a loss, as it says it continues to see deteriorating market conditions.
KB Home (Charts, Fortune 500) reported a second-quarter operating loss from continuing operations of $174.2 million, or $2.26 a share. A year earlier the company had earnings from continuing operations of $184.4 million, or $2.20 per diluted share.
Most of the loss was due to a non-cash charge of $308.2 million related to the writedown in the value of inventory and joint ventures, and the abandonment of land option contracts.
Analysts surveyed by earnings tracker First Call had forecast earnings per share of 7 cents, and while its not immediately clear how they will consider the charges when making comparison of actual results to forecasts, analysts have typically counted those types of charges against results.
On Tuesday, No. 1 homebuilder Lennar (Charts, Fortune 500) reported a loss of $1.55 a share, rather than the forecast narrow profit, due greatly to a similar charges of $1.33 a share. Analysts did not exclude those charges when comparing results to their forecasts.
KB Home's statement said it can't predict when it will see improvement in the market for new homes.
"Our second-quarter results reflect the current oversupply of new and resale housing inventory, a difficult situation compounded by aggressive competition and continued weak demand," said a statement from CEO Jeffrey Mezger. "Housing affordability challenges and tighter credit conditions in the subprime and near-prime mortgage market have also exacerbated current market dynamics, keeping prospective buyers out of the market, slowing the absorption of excess supply and further delaying a housing market recovery."
The sharp downturn in new home sales and prices have hammered results of all the nation's major builders. Besides the losses at KB Home and Lennar, builder Centex (Charts, Fortune 500) and Pulte Homes (Charts, Fortune 500), Beazer Homes USA (Charts, Fortune 500) have both posted an operating loss in their two most recent quarters. Hovnanian Enterprises (Charts, Fortune 500) has had three quarters of losses.
No signs of life yet for new homes
Lennar: More rough sledding for housing
Same buzzword was used in the 1990s. "Talking down the economy". As you point out, logic demands if it's possible to talk DOWN an economy then it must be possible to talk UP an economy.
All the kings horses, bubbly real estate ads, and happy talk won't reinflate this bubble.
Wishful thinking won't work here anymore than it would have kept the HMS Titanic afloat.
psychological factors like: anxiety, denial, fear, depression, PANIC, capitulation, and desperation.
I wonder how many houses Yun is buying.
Wonder were Lereah is now. Probably playing golf with that fat bastard Exxon ceo that they gave a 400M retirement plan to.
KB Home reports unexpected loss
It depends on who you asked. I fully expect homebuilders to lose money the next few years and some will go bankrupt
I can see Lereah sitting around on the beach saying:
"THANKS SUCKERS !!!!!!! "
I got PAID !
"Psychological factors"?
Like many markets being 20% or more overvalued v.s. the local economies and how much people earn or can afford.
According to the morons at the NAR, its a psychological factor why people won't or more to the point, CAN'T, buy real estate right now because they can't afford a 500K one bedroom condo as a starter home.
Thank you again, HP bloggers for pointing this out. Psychological factors? Absolutely true. Bang on, Laurence Yun, you've hit the nail on the head. The American consumer is no longer suffering under the euphoric delusion that there is such a thing as a 'can't lose' 'investment' (ie: real estate). So yeah, I'd say psychological factors are involved.
Mind you, the average FB continues to experience such grandiose fantasies. But the last 4 years were kinda like a rorschach test anyway: if you bought a house, you failed the test.
FU, Lereahnce Yun.
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