The Chinese water torture's got nothing on the National Association of Realtors. For months now, NAR economists have been spinning the worsening sales climate as something fictional, anomalous, and short-lived. Unfortunately, it looks to be anything but.

Existing-home sales, the NAR now says, will hit only 5.92 million units this year. Nowhere in today's press release does the NAR bother to quantify precisely what this means, so let's do it for them. Stop the presses! Here's your headline, boys!

"New home sales predicted to drop by 24%. Existing by 9%. Will probably be worse."

Why do I say worse? Because the NAR's home-sales predictions have been as useful as ice skates in Iraq, and they don't tend to err on the conservative side. They're so wrong, so often, that I started tracking them in a spreadsheet, just to document the pain. Here's how the NAR's nine months' worth of 2007 predictions stack up against last year's existing-home-sales figure of 6.48 million houses. First, the biggest chunk of the market, existing-home sales. (The last column documents the NAR's shameless headline spin.)

Existing Home Sales Estimates

Sales Estimate

Variation from 2006

NAR Spin

January

6.42

(0.93%)

"Gradual Rise Projected for Home Sales"

February

6.44

(0.62%)

"Existing-Home Sales To Improve, With Later Recovery For New Homes"

March

6.42

(0.93%)

"Housing Recovery Likely This Year, but Timing Isn't Clear"

April

6.34

(2.16%)

"Tighter Lending Standards Good For Housing but Will Dampen Sales"

May

6.29

(2.93%)

"Housing Forecast Changed Slightly Due to Impact From Tighter Lending "

June

6.18

(4.63%)

"Home Sales Projected to Fluctuate Narrowly With a Gradual Upturn"

July

6.11

(5.71%)

"Home Prices Expected to Recover in 2008 As Inventories Decline"

August

6.04

(6.79%)

"Near-Term Home Sales to Hold in Modest Range"

September

5.92

(8.64%)

"Mortgage Problems to Dampen Home Sales in The Short Term"

And while the NAR's craftily hidden doom and gloom bodes ill for millions of American home flippers stuck in bad mortgages, it looks just as ugly for homebuilders like Pulte Homes (NYSE:PHM), Hovnanian Enterprises (NYSE:HOV), Beazer Homes (NYSE:BZH), Ryland Group (NYSE:RYL), Toll Brothers (NYSE:TOL), Centex (NYSE:CTX), and all the rest. Here's how the NAR's ever-dwindling predictions for new-home sales stack up with last year's total of 1.05 million homes.

New Home Sales Estimates

2007 Estimate

Variation from 2006

January

 957,000

 (8.86%)

February

 961,000

 (8.48%)

March

 950,000

 (9.52%)

April

 904,000

 (13.90%)

May

 864,000

 (17.71%)

June

 860,000

 (18.10%)

July

 865,000

 (17.62%)

August

 852,000

 (18.86%)

September

 801,000

 (23.71%)

The rosy-lensed NAR predicts even sadder new home sales for 2008, at 741,000 units, or a 29% drop from 2006.

If the ever-optimistic NAR is predicting that kind of slowdown, I think it's going to be worse. We can only hope that it will be a much longer time before people are fooled into believing that housing is an "investment."

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At the time of publication, Seth Jayson, a top-10 CAPS player, had no shares of any company mentioned here. See his latest CAPS blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.