Mr. Yun,
What exactly is it that makes you think US home sales and prices will rebound next year?
* The record and swelling inventory?
* The worldwide crashing debt markets?
* The millions of REIC losing their jobs?
* The fact that renting is SIGNIFICANTLY cheaper than "owning"?
* The massive fraud-related demand and prices that will NEVER come back?
* The congressional investigations?
* The disappearance of no-down, no-doc mortgages?
* The looming recession?
* The blowup over at Fannie and Freddie?
* The hundreds of mortgage companies that have failed?
* The tightened lending requirements?
* The complete loss of confidence amongst potential buyers?
* The sea of foreclosures?
* The massive wave of ARM resets
* The destruction of collateralized debt, CDOs and SIVs?
* The loss of buying power of the US dollar?
* The plunging consumer confidence index?
I could go on. But Mr. Yun, please illuminate us. You're the Senior Economist after all, and obviously we have no idea what we're talking about here, since we're just silly little bloggers having fun.
You must know something we don't know Lawrence. Your detailed and sophisticated NAR financial models must be seeing something we can't see. You must think Manias, Panics and Crashes is just a bunch of hooey. Your studies of past manias and crashes must show that there's no relevance today. And you must have 21 great reasons too (the year round golf, right?).
So do tell. Please share with us your detailed financial modeling and statistical evidence that has led you as an economist to your conclusions. The floor is yours.
The market for existing homes is "hitting the low right now" and heading for a "modest recovery" next year, the chief economist for the National Association of Realtors said at the group's annual convention here Tuesday.
NAR expects the national median price of existing homes to decline 1.7 percent to $218,200 for this year and hold steady in 2008.
Yun said housing will start to recover next year, if only because people will keep getting married, having babies, changing jobs and retiring, forcing them to buy or sell homes. "The pent-up demand is there," he said.
November 29, 2007
HousingPANIC Stupid Question of the Day (for Lawrence Yun and the NAR only)
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36 comments:
Based on Yun's logic I should stop marketing to sell my books because the demand "is just there."
Went to an open house and the realtor hack was handing out a flyer on behalf of his mortgage broker buddy showing the ultra-cheap payments available on option-arm ... I'll scan that and send it your way. You gotta see it.
Mr. Yun,
No. The pent-up demand is not there. Buyers haven't been piling up, they've been sliding. People who have been waiting to buy a larger home will not go out and buy an even bigger house, because they had to wait. Renters (me) are not pent-up. Renting doesn't suck. I don't have to mow the lawn. There are many checks I don't have to write. Mr. Yun, your talk of pent-up demand sound like you are describing a bubble. Is your bubble going to pop, and hoards of needy buyers flood the housing markets? When is your prediction that THIS will happen? I tire of NAR yap.
Nice dig at Swann in the middle of a Yun rant :&)
Maybe he knows that Uncle Ben will lower the rates to 1% again and the USD will be worth toilet paper.
Renters (me) are not pent-up. Renting doesn't suck. I don't have to mow the lawn. There are many checks I don't have to write.
No, renting doesn't suck. That's why I can't understand why homedebtors try to paint a picture that we live in hell. Me and other renters I know don't live any differently than those who "own." A house is a house. It's four walls and a roof.
If you're a home depot addict who wants to remodel and change sh*t all the time then it would suck, but otherwise I'm very happy and more than willing to be patient and continue to sit things out until the time to buy is actually right.
I was reading an interview with Chris Squire of the band "Yes", the guys is easily worth at least $20 million or more and he said he's never owned a house and never will because renting is just easier. Come on homedebtors, tell me that guy "can't afford it" and is living in a dump ... I think not .....
This NAR duhconomist would be more credible if he was a lobbiest.
I find this guy reminiscent of another quote I remember...
"Our liquidity is fine. As a matter of fact, it's better than fine. It's strong."
- Kenneth Lay, deceased former Chairman of Enron
people are getting married, having babies, chaging jobs, retiring...
getting married
forced to buy: no
pressured to buy: sometimes
but now that news of price declines and a bursting of the bubble have hit local news and even Oprah, this should deminish. Job losses and tighter lending will likely even thwart the plans of those that are pressured to buy. Many that want to buy will realize they now need to save for a down payment. (80k or so in LA will take the average worker bees 5 or more years) and that's if they don't blow the money on leasing a new SUV every 3 years.
having babies
forced to buy: no
babies come with additional expenses such as higher medical costs/insurance costs, saving for college, nannies, sitters, feeding & clothing, car seats,...
Paying double current rents just to "own" seems like a lose-lose decision.
changing jobs
forced to buy: no
forced to sell: likely
other options exist such as renting out your old house for that 3% cap rate, but those with little or no equity will not be able to stomach the negative cash flow.
retiring
forced to buy: no
forced to sell: yes!
in fact after a year or so of price drops, many might think they better sell ASAP before their retirement nestegg dwindles away as they have little savings outside of their home equity. Remember the boomers are now retiring.
Once again Mr Yun you have been out analyzed by everyone (my cat included). You suck, but what do i know, i only got a B in ECON.
Why would anyone retiring want to buy an overpriced house? If anything, they should buy a small, cheap house and save up their money.
(Not that he would read this anyway, but here we go)
Mr. Yun:
As a financial analyst, I find it highly offensive that you use information from places like Merrill and Goldman as a comparative excuse for how pathetic the NAR forecast has become.
But what I find even more offensive is that your forward-looking view is based on generic, qualitative reasons (i.e. people need to get married, have babies, change jobs, and retire) which make it clear you have no idea how to properly generate a forecast.
This blog has you pegged. You, like your predecessor David Lereah, are nothing more than a paid REIC shill. You are not really a senior economist, but just another PR hack who happens to have a background in something that resembles economic studies.
If you were a real economist, you would take into consideration the massive amount of ARM resets next year, and the REOs that continue to sit on the market, as part of your data collection practices to generate your forecast. What you can't possibly fathom is that it's not just about demand, but it's also about supply. That's a shame considering that it's the most basic premise of economic study. You keep harping about the 'pent-up demand', but you totally ignore the factors affecting supply, which are driving down prices.
And by the way, what's with this 'pent-up demand' phrase that keeps popping up in NAR reports? Did it ever occur to you fools that demand was off the charts in 2003-2005? And did it ever occur to you that at least 20% of the 'pent-up demand' is from people who won't be able to qualify for a mortgage loan for many years to come? Most of all, who wants to buy a house now if they think they'll have to sell within 5 years, because prices are falling? Why don't you factor that into your demand forecast? I already know the answer....because the data used to back up your forecast is entirely self-serving, making the forecast invalid.
Sincerely,
A Real Analyst
Someone call Yun at the NAR and have him answer this question
Lawrence Yun, Ph.D Chief Economist and
Senior Vice President, NAR Research 202/383-7519
lyun@realtors.org
Dear Mr. Yun,
A tidal wave of hurt is heading for our money.
Take a look at this chart...
NAR Survey Research and
National Center for Real Estate Research
Paul Bishop, Ph.D. Managing Director, NAR Research 202/383-1246
pbishop@realtors.org
Everyone email these guys until they respond to us!!!!!!!!!!!!
Wouldn't the NAR be better off saying how bad it is so that the Fed lowers rates?
Sorry readers. The embedded link for Mr. Yun above doesn't work. Try this.
http://tinyurl.com/yuymye
or
http://news.newsmax.com/images/5668/HTgraph1.gif
That's one hell of a list Keith to go up against his stupid "people are having babies" argument
He brought a knife to a gunfight
Keith, pound for pound, could this be your best post on HP, ever? I think so.
I bet Seth Jayson picks this up.
Wow. Lawrence Yun's moronic statement just got thoroughly pwned by half a dozen people on this blog.
Yun's only defense: "Golden Sacks and Sterile Grinch are even worse at this than the NAR; by implication, that excuses my idiocy."
Pathetic.
Same sh!t ,different face.
The "pent up" demand is indeed there. At prices FAR LOWER than the current prices.
>> The fact that renting is SIGNIFICANTLY cheaper than "owning"?
Not for everyone, Keith.
Lawrence Yun for President!
"The market for existing homes is "hitting the low right now" and heading for a "modest recovery" next year, the chief economist for the National Association of Realtors said "
That's funny because here's DR Hortan's forcast for NEXT year.
"D.R. Horton Predicts '08 Worse Than '07
Tuesday November 27, 3:43 pm ET
D.R. Horton Chief Executive Don Tomnitz Predicts Housing Market Will Worsen in '08
NEW YORK (AP) -- D."
Mr. Yun, your credibility is GONE.
Anyone who listens to you DESERVES TO LOSE THEIR ASS.
"No Dr Yun, I don't expect you to talk. I expect you to die."
While I really don't condone violence, what is really needed is for one of these shills/CEOs to take a fast moving piece of lead in the cranium. Maybe that'll learn them. Alternatively, maybe dueling could be brought back - it really is one of the only true forms of accountability.
"You, Mr. Yun, have insulted me for the last time! Pistols at noon."
I wonder if he or any of the others would continue to talk so much smack.
I rent a better place than my neighbors who own and I do it for 1/2 the price. And, for those that recently purchased, their potential future sales price is getting lower and lower every day.
1923 all over again
Opps I mean 1929
Yun realizes that he'll survive the economic downturn, and he just has no interest (or care) for the concerns of millions of US tax-paying citizens who will be hit hardest by the economic storm approaching.
People would be wise to tune people (protected people) like Yun completely out, and focus instead on how they can best ride out the next 2-3 years.
Rent, house debt, as long as it makes *the most* sense for you financially is all that really matters anyways.
Yun is the anti-Keith. Both of you are at extremen ends of the spectrrum. Keith is at the doom and gloom end, Yun is at the optimist end.
Both of you have an agenda. Both of you skew numbers. Both of you are mostly full of shit. Both of you should be ignored at all costs.
The truth lies in the middle which is housing will fall some more but the world ain't about to end either.
I think Yun and his ilk truly beliebe what they say. You repeat a lie often enough you start believing it yourself.
Mr. Yun, explain to me how house prices are going to "recover" next year. There are only two ways that overall prices will rise or at least stop their current decline. One is a return to the real estate mania attitude and insane financing that we had a year or two ago. The other is if people's wages suddenly go up significantly on a large scale. No rational person can, in any way, see either of those happening for many years or even decades.
I just read one of the funniest things in Key West Chronicle, that is a slap to Yun's face. Here is the quote:
"Nationally, the real estate picture is bleak - despite assurances from realtors."
(from tinyurl.com/2rfo9o)
Maybe Yun and Orangello are hard at work in the Countrywide laboratory cooking up a new and more deadly strain of toxic mortgage.
Call it the 200/5/100 mortgage. You borrow 200% of the inflated bubble price of a house, interest only for the first five years, interest only for the first 5 years, the extra 100% is so you can make the payments for a few years atleast but can also be used for other essentials such as H2s, his and hers Harleys, quads for the kids, Carnival cruises and diinners at Red Lobster and Olive Garden, The term of the mortgage is 100 years which your kids will inherit along with the national debt, the cost of the Iraq war and the collapse of Social Security as the boomers retire. Good news for the kiddies is the interest will still be tax deductable: The Death Tax Break.
My god what evil have I unleased even conceiving of such a sadistic financial instrument of torture?
Well, Orangello, when you read this (we all know you're Dopes)and see the salvation of your evil empire, I want a cut, a big cut, of the action and I want it in Euros.
Realtors Fiddle While Home Sales Sink
By Seth Jayson (TMFbent) November 28, 2007
9 Recommendations
We all remember the tale of the doomed Titanic, and the musicians who kept fiddling while the ship sank into the icy waters. Were they idiots who couldn't see their doom, or were they fatalists who figured they'd put on a happy face to meet their end?
We might ask the same question today of the National Association of Realtors (NAR), the folks who work hard to ensure that their constituency gets 6% of your dough every time you sell your house.
Today, the NAR and Lawrence Yun, its new chief propagandist -- er, economist -- continued to fiddle and insist that all was well, despite that big old iceberg, the wet, numb feet, and the curious gurgling sounds from the shortest of the housing ships' passengers.
Take a look at this ridiculous and self-contradictory release, titled "Mixed Results for October Existing-Home Sales; Mortgages Improving." The NAR follows that front-line fib with what I can only characterize as a big, fat, stinking lie. The first line begins, "Single-family existing-home sales were stable in October."
"Mixed" results? "Stable" sales? There's nothing mixed about a nearly 21% drop from October 2006. There's nothing stable about a housing inventory that has jumped 15.4% year over year, so that the months'-supply number screamed upward by 46%, meaning there is now an incredible 10.8 months' worth of homes on the market. It's amazing the way this real estate trade group can't bring itself to put a realistic perspective on the numbers it releases itself. Click here for the unvarnished figures. (Downloads an Excel spreadsheet.)
Incredibly, the NAR continues to pile the manure on even more thickly, trying to explain away a dismal, 5% median-price drop by claiming that problems in jumbo-loan markets changed the mix of homes sold for the worse. Sorry, NARleys, but yesterday's Case-Shiller home price index numbers, which I discussed here, clearly illustrate the ongoing record (and accelerating!) drop in home prices.
And yo, my NARleys, if you're going to cry about the sales mix moving the results downward, offer up the figures to prove it. Better yet, adjust your pricing statistics to clearly account for incentives given to buyers, as well as remodeling, additions, and other investments that move the sales prices upward without actually representing a capital gain.
With inventory that high, prices will continue to tank, which will mean problems for desperate sellers, as well as builders such as Beazer Homes (NYSE: BZH), D.R. Horton (NYSE: DHI), Ryland Group (NYSE: RYL), Toll Brothers (NYSE: TOL), Hovnanian Enterprises (NYSE: HOV), Pulte Homes (NYSE: PHM), and KB Home (NYSE: KBH).
If this is how the housing-ship Titanic looks now, how buoyant do you suppose it will be in a few months, when all those newly foreclosed properties hit the market?
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