The NAR Predicts Sunshine and Lollipops

By
Real Estate Agent with RE/MAX Realty Group

NAR Graphs

I just returned from the National Association of Realtors convention in San Diego. NAR's chief economist Lawrence Yun spoke to a room packed with REALTORS® and projected that real estate prices would climb about 4% in 2010, while the number of home sales will increase 15%.  He also predicts that foreclosures will peak during the first half of 2010 and that Realtor incomes will go up 20 percent next year.

I'm an optimist. Sometimes I even show Pollyanna tendencies, but I just can't join the partying that is breaking out in real estate offices across the nation based on his predictions.

In newspapers and blogs, the mockery has already begun. Take this typical response to Yun's predictions from The Wallet Pop blog: "The good news: National Association of Realtors chief economist Lawrence Yun is predicting that home prices will rise 4% in 2010. The bad news: Lawrence Yun has never been right about anything in his entire life, ever."

A comment on Yun's prediction on the FreeRepublic website by the Antiyuppie was simply "This guy (Yun) was hired because Baghdad Bob had already been snagged By Al-Jazeira. Really."

The Wall Street Journal's Market Watch reported Yun's predictions and has received 200 comments. The most popular comment as voted on by readers was by Economutt, "Gee, I better run out and buy a house before they're all gone. ;-)"

How many times does an economist have to be wrong before people stop taking him seriously? Why do NAR economists as well as real estate association executives feel the need to serve as cheerleaders?

Wouldn't a good dose of reality serve us, as well as the public, better?

Linda Davis has been selling real estate in Ledyard CT for 32 years. You'll find Linda's profile on her Online Buesiness Card. 

Old Time Rainers keep asking if I'll ever do another Carnac Post.  I'm trying to muster up some predictions for 2010.

 

close

Re-Blogged 7 times:

Re-Blogged By Re-Blogged At
  1. Mark Rienzie 11/21/2009 08:40 AM
  2. Michael Dougherty 11/21/2009 08:58 AM
  3. Joe Spake 11/21/2009 10:14 AM
  4. Ronnie Fruehauf 11/21/2009 10:24 AM
  5. Chris Mackey 11/21/2009 10:52 AM
  6. Jim McCormack 11/21/2009 05:09 PM
  7. Dana Harris 11/22/2009 01:20 PM
Topic:
ActiveRain Community
Tags:
national association of realtor convention
nar 2009
carnac of connecticut

Anonymous
Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
27,473
Diane Schubach
Laffey Fine Homes - Port Washington, NY
I’m surprised by some of the harsh comments here. As pointed out by many, predicting is not an exact science even when done by so-called experts, so why not be positive? How foolish would the man look if after spending months pushing hard for extended and expanded tax credits, he predicts a tepid year? I agree with those who say that it’s a good time to buy if you want or need to and can afford it; and it’s a good time to sell if you want or need to sell and the conditions are right for the seller. Whether or not the market is optimal shouldn’t enter into it.
Nov 23, 2009 01:08 PM #225
Anonymous
Anonymous
Jan

I agree that the NAR is trying to sugar coat the situation.  My husband is a foreclosure attorney in Ohio.  His caseload has almost doubled just in the last 3-4 months.  In over 30 years of doing this, he has never seen so much "A" paper come through his office.  In Ohio, it takes 9-16 months to get these homes through the system before they come on the market.  Given that information, all I see are forces continuing to drive prices down.  Those good loans will be houses in the $200,000 + markets.  When you have that many distressed properties coming on the market in those price ranges, how can it be any different?  Also, this administration has done nothing to stimulate small business and encouraging businesses to hire.  Anyone who doe not need to see their home now, is going to hunker down and wait to see how this precarious economy plays out.  I know predicting is not an exact science and I don't have Yun's credentials but to me this is common sense.  I believe his predictions ultimately harm NAR's credibility as a reliable source of information.

And, with that, they want my dues....

Nov 23, 2009 01:57 PM #226
Anonymous
Anonymous
Jan

I agree that the NAR is trying to sugar coat the situation.  My husband is a foreclosure attorney in Ohio.  His caseload has almost doubled just in the last 3-4 months.  In over 30 years of doing this, he has never seen so much "A" paper come through his office.  In Ohio, it takes 9-16 months to get these homes through the system before they come on the market.  Given that information, all I see are forces continuing to drive prices down.  Those good loans will be houses in the $200,000 + markets.  When you have that many distressed properties coming on the market in those price ranges, how can it be any different?  Also, this administration has done nothing to stimulate small business and encouraging businesses to hire.  Anyone who doe not need to see their home now, is going to hunker down and wait to see how this precarious economy plays out.  I know predicting is not an exact science and I don't have Yun's credentials but to me this is common sense.  I believe his predictions ultimately harm NAR's credibility as a reliable source of information.

And, with that, they want my dues....

Nov 23, 2009 01:58 PM #227
Rainmaker
230,076
Debbie Summers
Charles Rutenberg Realty - Orlando, Florida - Lake Mary, FL
MoveToLakeMary.com or 407-758-1020

WE are going to have 4% appreciation... REALLY?!? 

Central Florida has a long way to go before we see 4% appreciation.

Nov 23, 2009 05:02 PM #229
Rainmaker
67,154
Shelly Whitworth
MorSystems.com - Carmel, CA

WOW as long as unemployment keeps going up, so will foreclosures. not to mention option arms are resetting into late 2010... high foreclosures will be around for atleast another year or two is my guess... we are where we have never been before, and those are some rosy numbers up top. CA, FL, NV, AZ will have even longer!!

AND there are so many unknowns like unemployment, new house starts, inflation, new loan mods, bank activity and interference, new regulation and on and on...

That said, positivity and the strength to move through and forward is so important. You can be realistic and still be positive. Easier said than done ;)

Nov 23, 2009 06:12 PM #230
Rainmaker
166,570
Linda Davis
RE/MAX Realty Group - Gales Ferry, CT

Thank you so much for your informative comments.  I'm working on a follow up about the subject as I take all of your input and let it roll around in my brain for a few days.

Nov 23, 2009 08:43 PM #231
Rainmaker
166,570
Linda Davis
RE/MAX Realty Group - Gales Ferry, CT

The comments include a bit of everthing from serious to funny and complete with photos and audio! 

Mark Warner gets my "Brevity is the Soul of Wit" award for his comment....

If economists were laid end to end across the US it would probably be a good idea.

 

Nov 23, 2009 08:48 PM #232
Ambassador
248,997
Fran Gatti
RE/MAX Coastal Redwoods - Crescent City, CA
Realtor, CDPE, RDCPro - Crescent City CA Real Esta

Linda,

I read a lot of the comments and what can you say other than real estate is local.  Some markets are improving for whatever reason. 

Sales may be brisk in some areas of CA, even in my market, but the median price is in the toilet, the DOM is through the roof and getting an escrow to close on time is the rarity.  With CA legislators mucking up our economy I don't see things improving for CA real estate anytime soon.  I do want to be one of those agents who sees the positive side of things...and there is one, buyers who were priced out of the market are now able to purchase a home and that's exciting. 

Nov 23, 2009 11:20 PM #233
Rainmaker
340,453
Debra Gould
Staging Diva / Six Elements Inc. - Toronto, ON
The Staging Diva

I've bought 7 houses in 4 cities and dealt with hundreds of real estate agents because I've also been staging homes for 7 years. I have yet to meet an agent who will say "this is a bad time to buy a house".

So why would you be surprised at what the NAR says? Isn't it their job to promote optimism and convince regular people that they still have a need for real estate agents?

Besides, October sales were the highest they've been in 2.5 years!

Nov 24, 2009 10:20 AM #234
Rainer
17,903
Marilyn Bell
Nashville, TN

I truly believe it is a good time to buy a house in my area.  Is it the best time?  I don't know.  I don't have a crystal ball.  However, I have been telling clients and potential clients (depending on their circumstances) that it's not a good time to sell.  I have also told potential clients in the past it wasn't a good time for them to buy.  Even in what I consider to be a great time to buy, I have often subscribed people to my email campaign about budgeting/credit/finance and told them to hang tight and get their houses (finances) in order before they buy.  I have an investor right now that has cash for an investment property and I've counseled him to pass on several homes lately so he'll get a good one, not just one to get one.  I'd much rather turn someone away who is not in a position to buy.  People will tell just a fraction of people about a good experience versus a bad experience (which could be me putting someone into a house when they aren't ready).  There are many ethical agents out there, and it's a shame we get a bad rep due to so many others... others who often leave the business within a year.

Nov 24, 2009 10:30 AM #235
Anonymous
Anonymous
Sarah Rollason

I have to agree with other posts- real estate is definitely local.  I sell in a resort/vacation home market and yes things are moving (mostly bank owned), but until the jobs return, we won't see the borrowers.  JOBS, JOBS, JOBS- that is the bottom line in this market/economy.

Nov 24, 2009 12:20 PM #236
Rainer
2,136
Whitney Meddaugh
Re/Max Realty Suburban, Inc. - Shawnee, KS

Isn't it great how everyone thinks they are an expert and the one that knows what will happen?  Nobody knows for sure what will happen and only time will tell. 

We all have decisions to make every day and the biggest one is "What are we going to focus on?". 

 People who succeed focus on what they can control!

Nov 24, 2009 12:25 PM #237
Rainmaker
113,222
Bob Krus
Keller Williams Foothills Realty - Evergreen, CO
What About Bob? For All Your Real Estate Needs!

Whitney, This is the most relevant posting on this thread!

Nov 24, 2009 04:04 PM #238
Ambassador
1,576,229
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

He's definitely optimistic.  My concern is the mortgage resets as shown in the graph above.

Things are looking up, but this sounds very optimistic.

Nov 24, 2009 04:45 PM #239
Rainer
31,555
Linda Landry
HomeSmart Realty - Tucson, AZ

Um is Mr. Yun not realizing real estate is local?  Not a prediction that would apply to everyone and everywhere even if he was right.

Nov 25, 2009 09:45 PM #240
Anonymous
Anonymous
Thomas Phelan

There were three Economists who decided to climb a high mountain. During their climb a blinding snow storm halted their ascent.

When the snow storm abated the three Economists quickly removed maps and charts from their backpacks.

After studying them for over an hour one of the three Economists looked up and said: “According to our maps and charts, we are on that mountain over there.”

NAR Economist Leah split when the going got tough.

NAR Economist Yun is desparately trying to pump up a sagging real estate market balloon.

Nov 27, 2009 08:56 AM #241
Rainmaker
34,634
Cathy Sarmento
Granite Real Estate "Cool Team" - Auburn, CA

Here in California we were honored with our Economist from our state board.  It was very interesting, with about the same amount of accuracy as NAR; that the power point slides above thier head as they were touting recovery painted quite a different picture.  I do hope for a better future but feel it is disrespectful of our intellect and misleading to newer agents not to be more honest about the near future.  I think many agents were using this info to decide whether they could hang in there or whether they should consider a new career.  Using false predictions to bolster membership is unconscionable in my opinion.   They should instead focus on basics, technology and "best practices" to clean up our name in the public forum.

Nov 28, 2009 01:58 PM #242
Rainer
15,135
Charles E. Jack, IV
Charles E. Jack Appraisal & Consulting - Las Vegas, NV
MAI

Just thought I'd wake up this post a bit... It's always fun to see if the forecast was right or not...

Case Schiller shows the Composite 10 CSXR down -1.20% from December 2009 to December 2010.

Case Schiller shows the Composite 20 SPCS20R down -2.38% from December 2009 to December 2010.

The Case Schiller index for San Diego is up 1.71% from December 2009 to December 2010.

May 01, 2011 05:31 PM #243
Rainer
15,135
Charles E. Jack, IV
Charles E. Jack Appraisal & Consulting - Las Vegas, NV
MAI

OK, here's the official stats from NAR itself:

http://www.realtor.org/files/research/localmarket/ca_sandiego.pdf

http://www.realtor.org/research/research/ehsdata

Oops. Guess home sales in San Diego actually declined. Guess appreciation in San Diego was below the 4.0% forecasted as well.

May 01, 2011 05:51 PM #244
Anonymous
Anonymous
Joffrey Long

NAR is the gift that keeps on giving. 

 

Joffrey Long

Southwestern Mortgage Inc.

Jun 14, 2011 12:42 AM #245
Anonymous
Post a Comment
Spam prevention
Show All Comments
Rainmaker
166,570

Linda Davis

Ask me a question
*
*
*
Spam prevention

Additional Information