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A First In The History Of Mainstream Media? NAR Is Identified As A Joke!
I made a brief appearance on Bloomberg yesterday with the lovely Lisa Murphy, in which she introduced me as the fellow “who correctly predicted the housing bust, and a skeptic of the NRA’s predictions who considers their forecasts a “joke”, and doesn’t mince his words”. I couldn’t help but laugh at the joke that wasn’t funny, lending credence to the NAR…
Yes, it brought a smile to my face as you can see from the video below.
So, what’s my beef with the National Association of Realtors? Well, quite frankly they are simply doing their job, which is lobbying on behalf and marketing the interests of realtors in the US. The fact of the matter is that they not only undermine the credibility of all in the profession but purposefully mislead those who may not have the money to spare into flushing said hard earned dollars down the toilet, all of the sake of a 2.5% commission split. Let’s take this step by step, shall we?
On Tuesday, February 22nd, 2011 at 3:14 pm I posted “When Will the Mainstream Media Be Ready To Call The NAR The Sham That It Really Is?” wherein I laughed at the WSJ article that illustrated where the NAR’s housing data may have understated extend of collapse. But of course, it understated said collapse. If one were to peruse the history of the NAR and their paid marketers economists one will see a very long history of such.
The NAR video from 2008 saying that buying opportunities have never been better| buying now is a key to building long term wealth | there are a lot of buyers in the market to buy your home, etc. while I was saying the commercial and residential real estate markets are in the beginning of a long term collapse…
This is David Lereah, the NAR chief economist in 2006…
Then again, one can peruse David Lereah’s literary prose, circa 2006-7…
Absolutely exquisite insight!!!
It’s not just David. After moving on, Lawrence Yun (David’s successor) got nearly 8 minutes on Bloomberg (hopefully, I will get the chance to get 10 or 15 minutes to truly illustrate the lay of the land from an unbiased, empirical, investor’s perspective sometime soon) to say that 2008 was an opportune time for buyers who want to own a home
Here’s Dr. Yun with more good news for home sellers in 2008. Ohhhh, the optimism!!!
In July 2008 Yun stated “I think we are very near to the end of the housing downturn,” Yun said (AP News).
Lawrence Yun, chief economist for the Realtors, said that the housing rescue bill should play a major role in helping the housing market to rebound. He said an especially significant feature is a tax break worth up to $7,500 for first-time home buyers who purchase between April 9 of this year and July 1, 2009. Yun estimated that up to 3 million first-time home buyers could qualify for that tax break, providing a significant boost to sales at a critical time. “I think we are very near to the end of the housing downturn,” Yun said.
As a point of reference..
Of course, I can go on…
In 2007 Lawrence Yun state there would be no recession in 2008, according to USA Today. Of course, in that year I took the opposite side of that trade and said very bad things were coming. As it turned out I was a tad bit optimistic: Correction, and further thoughts on the topic, How Far Will US Home Prices Drop?, and Is this the Breaking of the Bear? (Yeah, the Bear Stearns and Lehman Brother’s collapse were an easy calls if you read the balance sheets and were realistic about leverage and the real estate situation). This was also about the time I got into it with GGP’s CFO for calling out their insolvency. He called me names, and then they filed for bankruptcy. Of course, they had an investment grade and buy ratings from the ratings agencies and the sell side: BoomBustBlog.com’s answer to GGP’s latest press release and Another GGP update coming… (among over 700 pages of analysis, review the January 2008 archives or search for “GGP” for more research).
In my post “On the Latest Housing Numbers” of Tuesday, November 24th, 2009, I quipped.
Lawrence Yun, NAR’s chief economist volunteered,
“We have seen some bulk purchases by investors, but we are not picking up that data through the Multiple Listing Service or through our release data, but we do know that there is some bulk purchases by investors who plan on releasing those properties within a year’s time, when they see a better market condition.”
I don’t believe “better” market conditions are coming any time soon. We are just coming off of the best market conditions anyone will see in their lifetime. Those market conditions were predicated upon unsustainable conditions, hence they came crashing down. They are crashing down, not crashed – as in past tense. I believe we have some ways to go. That is why I am not buying real estate, and I believe that those that are jumping in now are jumping in prematurely.
Personally, I don’t consider Mr. Yun to be a credible source, either. He may be smart and capable, but the extreme bias of his employer (the ultimate real property perma-bull) and the incredibly biased reports of his predecessor color his opinions by default. He is not nearly as bad as David Lereah (who was literally sensationalist-style perma-bullish) was, but he is still not objective. See The Reggie Middleton Real Estate IQ Test – Who believes the NAR?
This is an excerpt from that post on Tuesday, 08 January 2008
From CNBC.com: Home Sales Seen Holding Steady In Coming Months
Pending sales of existing U.S. homes inched lower in November and should hold steady over the next few months, a real estate trade group said. (I ask, “Why should they do that? Credit is tighter, recession evidence is stronger. Supply is greater, and demand is lower. Hmmm, let me consult the book written by that ex-NAR guru for the answer.” )
The National Association of Realtors Pending Home Sales Index, based on contracts signed in November, dropped 2.6% in November, to 87.6 from an upwardly revised 89.9 in October.
Economists polled by Reuters ahead of the report were expecting pending home sales to decline by 0.5 percent from October’s originally reported 87.2.
The November number was down 20% from a year earlier.
The pending homes sales data suggests that the volume of sales will hold steady for a while before turning upwards before the end of the year, said NAR chief economist Lawrence Yun.
With all due respect to Mr. Yun, Mr. Lereah and the NAR, anyone swift enough to complete the registration form for this blog should know, by now, to discount this association’s data and opinions. They do not do the industry justice with this nonsense. Realtors should actually be the first in the protest line. It is their credibility that is being called into question, for this is THEIR trade group. Credibility is the key!
Notice how accurate that NAR prediction was for 2007 and 2008! We are actually in a real estate depression, and no amount of flowery commercials with cute little girls can counteract this fact.
- In Case You Didn’t Get The Memo, The US Is In a Real Estate Depression That Is About To Get Much Worse
- Further Proof Of The Worsening Of The Real Estate Depression
- Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate
So, I query the mainstream media, “At what point do these clowns lose credibility?” For consumers of such media, at what point will you refuse to view said clowns?
I’m not in the business of giving out buying advice to potential homeowners, but if I were a home buyer and I cared about capital depreciation in the near to medium term, I would definitely hold off. I have crunched the numbers for March 2011 and calculated the most recent shadow inventory numbers for subscribers. It ain’t pretty. Click here for the PDF summary (Shadow Inventory Update) and click here for the embedded spreadsheet with the latest numbers, graphs, projections and calculations (note that this is actually a very large model, so be sure to scroll past the first 6 or 7 graph tabs to access the raw data and calculations behind them). You can increase the magnification of your browser if you want a larger view of the embedded model.
Subscribers have access to all of the data and analysis used to create these charts, in addition to a more granular application, by state in the SCAP template and by region in housing price and charge off templates – see
- House price data, 2nd Quarter 2010
- Bank Charge-offs and Recoveries 2Q10
- The very extensive SCAP Assumptions, showing the credit metrics banks needed to submit for the stress tests of 2009, Updated for last quarter on a state by state basis_09082010 Web
The 3rd Quarter in Review, and More Importantly How the Shadow Inventory System in the US is Disguising the Equivalent of a Dozen Ambac Bankruptcies! Wednesday, November 10th, 2010: All paying subscribers can download the full shadow inventory report here: 
Foreclosures & Shadow Inventory. Professional and Institutional subscribers should also download the accompanying data and analysis sheet in Excel – Shadow Inventory.
Banks, Monolines, and Ratings Agencies As The Three Card Monte (Wall)Street Hustlers! Its a Sucker’s Bet, Who’s Going to Fall for it in QE2? Tuesday, November 9th, 2010
The Truth Goes Viral, Pt 1: Housing Prices, Economic Sales and the State of Depression Tuesday, October 5th, 2010
»
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In a rational, just nation, Lereah and Yun would have been arrested and the NAR disbanded for conspiracy and treason. In a just, irrational nation, Lereah and Yun and their minions would have been chased by angry mobs and lynched.
In America they get slots on CNBC and Fox where talking heads whine about how house prices refuse to rise or promise instead for the 1000th time in as many days that it is the bottom. And fat, ignorant Americans who desparately want to believe in credit and Horatio Alger watch Jersey Shore and blame Obama for being underwater on their McMansion.
Ha, ha, ha, ha.
As the market crumbled--empty store fronts, more defaults, zero down buyers galore---their numbers seemed out of touch with reality...so far fetched you had to be sucking the Bong to believe them.
Great article! Thnx.
i love your research but it's quite obvious commercial real estate could care less about your analysis. it continues to go straight up.
reggie, excellent interview, she is lovely and has big breasts†
realtors are scum. how in the heck do these POS get the worthless name realtor, now the R needs to be capitalized. these people are the devil, and the dumbest ass holes i have ever had the great pleasure of listening to them. they are re born again predators. shit fckers, every one of them. they lie, and commit perjury just to save face. scoundrels.
"Kevin over at Minyanville imagines what the subsequent title revisions will look like in the future:
2007: "Why the Real Estate Boom Will Not Bust and How Foreclosures are Technically Part of the Continuing Real Estate Boom, In a Way."
2008: "Why the Real Estate Boom in Distressed Properties Will Not Bust (except in certain local markets) and How You Can Use Leverage to Profit From It."
2009: "Why the Phrase "Real Estate Boom" is Often Misunderstood to Mean Higher Prices and How You Can Pray for Them."
2010: "Why the Real Estate Boom Will Soon Bounce Back and How to Eventually Profit From It."
2011: "Why Did I Have to Write "The Real Estate Boom Will Not Bust Through the End of the Decade" and How Did I Not Realize How Long A Decade Really Is?"
2012: "Oh, Dear God, Please, Please Let the Real Estate Boom Bounce Back... and How You Can Profit From It."
2013: "Please, Please, Just Let the Real Estate Boom Come Back This One Time for This One House and How You Can Break Even From It."
2014: "Why I Am Willing to Accept a Small Loss of 35% On the Real Estate Boom and No Longer Care About How to Profit From It."
2015: "Why Can I Maybe Borrow a Couple Dollars Off You Until the Real Estate Bust is Over?"
Too funny -- thanks Kev . . . "
It is amazing that just about all commercial media has turned into cheer leaders spewing fairy tales as fact. I know several retailers whose policy is to enthusiastically proclaim "business is great" even if there is no business. They believe puffery (aka lying) will create sales. Real estate agents/associations are no different.
When I get into financial and political discussions people remark that I am "doom and gloom" oriented. I reply that unfortunately I have some understanding of the inter-relationship of facts and reality. I feel good about myself because I can make decisions based on knowledge and feel so sad most people will be getting a terrible lesson that will devastate them.
This morning dismal housing stats. and the market goes up! Just another day in the land of Ponzi.
Right! You sound like gloom and doom to them because you aren't on their "drugs." (Media spin, credit, etc.).
This is why I got out of selling real estate 3 years ago. Besides the fact that the real estate market was crashing, I couldn't with a good conscience recommend buying and sellers weren't willing to accept the fact that their property went down in value. I will never forget the look in the eyes of the people I sold my house to in March, 2007 for $249k. Today that house is "worth" about $125,000. I am happily renting! The NAR always seemed like a joke to me as far as their outlook and predictions.
This is hidden on the front page of Yahoo -- Finance.
Home prices falling in most major US cities Home prices falling in 19 major US cities, with 4 now at lowest level in 11 years
We've yet to deal with the fact that clear chain of title has been destroyed on tens of millions of homes. All our VIN numbers got scratched off.
Has anyone ever heard a realtor say that "now" IS NOT a good time to buy real estate?
They are all snake oil salesmen (and women)
There are some opportunities ou there. Problem is that the taxes still remain up. In one of the foreclosures I liked, the tax was as high as the monthly payment. Geeezz!!
...Another Truth Friends...
"G-d is Dead, F*ck is the Now the Most Popular Word in the English Language..."
http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/01/god-is-dead.html
No , You hope God (of the Christian Bible ,not the fake gods like allah)is dead so you can live out your lusts with no consequences. A big bad surprise awaits you
Good on you, Reggie.
Glad someone is trying to tell the truth. My brother believes all this bullish housing crap and convinced his daughter to plough all her savings into a down payment on a home in a distressed area where the prices have been going down parabolically for two years. Poor kid.
Were you blushing a little Reggie in front of the lovely Lisa Murphy?
All I can do is look at our YTD figures that deal solely with consultation/remediation for RE sales:
21 work orders for RE closings; of those 13 were for "normal" sales (62%) and 8 for REOs/short sales (38%).
In 2010 it was 90% normal & 10% REOs/short sales.
Does that look like a housing recovery to you?
I tried to buy or check out a copy of David Lereah's book just for laughs. It seems to have completely disappeared from the face of the Earth.
I got mine here last year: http://www.paperbackswap.com/index.php
I keep it for laughs - who knows one day it might fetch big bucks on ebay
Fear not...
Used from £0.97 - http://www.amazon.co.uk/Are-Missing-Real-Estate-Boom/dp/0385514344/ref=sr_1_1?ie=UTF8&s=books&qid=1301403792&sr=8-1
Congratulations, Reggie, on your success in making some consistently excellent calls, based on diligent research and keen analyses.
If there more Reggie Middletons in the financial world, the financial world would be a far better place in terms of truly serving the needs and goals of its client base.
As to your article, from a legal standpoint, I'd really like to see ratings' agencies come under increased scrutiny, as they've so far not only done a horrific job in terms of accurately predicting safety or risk, but they've actually gotten into the shady business of intentionally marking assets, products and instruments up, in exchange for revenue from biased sell-side firms; i.e. you can buy ratings' agencies off, apparently, as we saw vividly in the John Paulson & Goldman Sachs Abacus scam.
Reggie,
What is happening to Commercial RE? it looks like it has been levitating for too long?
timing is everything. Any thoughts?
We love your work.
I forwarded a bullish Bloomberg article to a realtor friend recently. He said it was of no value because it cited Lawerence Yun, who is considered to be a joke by customers and realtors alike.
http://www.bloomberg.com/news/2011-03-23/naples-rises-from-florida-housi...