From Bubble Talk to Double Talk

This won't be a news flash to anyone who's read my musings on this space before.

The National Association of Realtors (NAR) is talking out of both sides of its mouth in its continuing effort to calm homebuyers as the housing bubble rapidly deflates.

To wit, the front page of the NAR website features a fancy graphic news crawl with stories about hot young real estate clerks and a Dubya-approved, made-for-a-self-interested-monopoly-trade-group celebration called "National Homeownership Month."

There's even a link to a June 1 release titled "Housing Market Seems to be Stabilizing." Funny, that last one, because it not only tries to paint heavy year-over-year drops as a good thing, it also looks like a direct conflict with today's NAR press release, which predicts a steeper drop in home sales and home prices than the NAR had previously predicted. The NAR doesn't exactly come clean on this, however, but luckily for us, the folks at Reuters are keeping track of the past. Bottom line, the NAR expects home prices to "ease" 1.3% now, and new home prices to drop 2.3% this year.

But you'll want to down those predictions with a fifth of bourbon, especially if you bought into this bubble hoping for a quick flip.

As I've shown time and time again in the past, the NAR's predictions are congenitally rosy -- too rosy, especially in a climate that shows lenders going belly-up and those remaining tightening credit and hitting up Wall Street, hat in hand, in order to survive. Accredited Home Lenders (Nasdaq: LEND), Fremont General (NYSE: FMT), Novastar Financial (NYSE: NFI) and others have survived by the skins of their teeth.

If you must get your scuttlebutt from folks in the biz, I suggest you take your lead on this housing market from the homebuilders. Their uniform view can be summarized as, "The housing market is in rough shape." The management at outfits like Toll Brothers (NYSE: TOL), Hovnanian Enterprises (NYSE: HOV), D.R. Horton (NYSE: DHI) and others has been much more candid, no doubt because the Feds who regulate securities take a dim view of bogus predictions.

There are no such worries for the NAR. Thus, it continues to make rosy statements and, unfathomably, is still quoted by the national press as if it's 1) an expert on housing and 2) a disinterested party. Never mind that recently departed NAR economist David Lereah proved the opposite time and time again.

It comes down to this: The NAR's prospective on housing is irrevocably skewed because its very existence depends on the fiction that housing is a good "investment." All evidence points to the contrary.

A home is a great place to live, but not when it leaves you poor.

• Quick Take: Realtors Under Fire
• House Price Drop? That's Unpossible!
• I Want My Bubble Back!

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At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.