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?
For more on the NAR and the housing market:
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