When Will the Mainstream Media Be Ready To Call The NAR The Sham That It Really Is?

Reggie Middleton's picture

The Wall Street Journal reports: US housing data may have understated extend of collapse. I can do naught but laugh. Are they serious? Don’t they even bother to read BoomBustBlog? The WSJ story goes on to read…

The housing crash may have been more severe than initial estimates have shown.

The National Association of Realtors,
which produces a widely watched monthly estimate of sales of
previously owned homes, is examining the possibility that it
over-counted U.S. home sales dating back as far as 2007.

… The group reported that there were
4.9 million sales of previously owned homes in 2010, down 5.7% from 5.2
million in 2009. But CoreLogic, a real-estate analytics firm based in
Santa Ana, Calif., counted just 3.3 million homes sales last year, a
drop of 10.8% from 3.7 million in 2009. CoreLogic says NAR could have
overstated home sales by as much as 20%.

While revisions wouldn’t affect
reported home-price numbers, they could show that the housing market
faces a bigger overhang in inventory, given the weaker demand.

In December, NAR said that it would
take 8.1 months to sell some 3.6 million homes listed for sale at the
current pace, but the number of months it would take could be even
higher if sales are revised down. Any revisions wouldn’t have an impact
on homeowners, but it could have consequences for the real-estate
industry. Downward revisions would show that “this horrific downturn in
the housing market has been even more pronounced than what people
thought, and people already thought it was pretty bad,” said Thomas
Lawler, an independent housing economist.

NAR said the data, which are used by
economists, investors and the real-estate industry to gauge the health
of the housing market, could be revised downward this summer. Lawrence
Yun, chief economist at NAR, wasn’t specific about whether and by how
much the revisions could reduce reported sales, and he raised the
possibility that the CoreLogic estimates have understated the number of
home sales. “This is a very important issue, and we are looking at it
carefully right now,” Mr. Yun said.

I’m willing to go on record saying that the NAR’s economic tallies
and their forecasts are simply jokes. Their “so-called” economists are
shills and paid for marketing figures, nothing more. I have clearly
stated this in the past. In absolute fairness to the MSM, I have been getting more airtime to espouse my decidedly contrarian views - including multiple spots on Bloomberg and CNBC. I will be a guest on CNBC's Fast Money tomorrow (Thursday the 24th) for a full hour. It should be quite fun for I do plan to spread a lot of the anti-NAR disinformation-bust juice around! Tune in to join the fun.

Alas, back to the matter at hand. Let’s reminisce via excerpts from Pay Attention to the National Association of Realtors and Their Chief Marketing Agent At Your Own Risk! and
More Optimistic Fluff And Spin on Pessimistic Macro Numbers – This
Type Of Reporting Simply Drives The More Intelligent, Valuable Eyeballs
To Alternative Media, Ex. Blogs
Wednesday, December 22nd, 2010

What is actually entertaining is to here
quotes from NAR chief economists in the mainstream media (MSM). At what
point do these guys lose credibility? The mere quoting of some  such
as the NAR’s Yun, or to a greater extent, his predecessor, is enough to
permanently lose some valuable (as in more intelligent, higher paid)
eyeballs to alternative media. To wit, as excerpted from Pay Attention to the National Association of Realtors and Their Chief Marketing Agent At Your Own Risk!:

On the topic of the National Association
of Realtors, and their marketing gurus chief economists, I assert that
BoomBustBlog’s regular constituency is much too bright to fall for
the pumping of real estate by the economist of a national realtor
association. For those that may be a little more trusting, or a little
less mathematically inclined, I will walk through previous
proclamations that have come from the NAR and their chief marketing
strategists economists…

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
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 2008!

There’s much, much more to throw onto the fire…

My take: I believe that my blog’s
readers are considerably above average in financial acumen and common
sense. The NAR is simply not an entity to be taken too seriously,
due to the obvious conflict of interest exemplified by their
ex-economist, [[David Lereah]], who published some of the most absurd
BS I have ever seen come from a nationally reknown organization.
Examples of his work from Wikipedia:
Are You Missing the
Real Estate Boom?: Why Home Values and Other Real Estate Investments
Will Climb Through The End of The Decade, And How to Profit From
was published in February 2005 at just about the tippy top of
the bubble (that takes some talent). One year later in February 2006,
as the market is already on it’s way down, Lereah retitled his book Why the Real Estate Boom Will Not Bust and How You Can Profit from It. Lereah’s previous book The Rules for Growing Rich: Making Money in the New Information Economy touting investment in technology company equities was published in June 2000 at the onset of the collapse of the dot-com bubble
This extreme cheerleading has died down substantially, but the
overly optimistic spin is still evident with their new economist,
Lawrence Yun.

I actually believe the Case Shiller graph
above to be misleadingly optimistic due to my doubts about
seasonality filtering and the exclusion of investor related properties
(flips, see A reminder concerning popular housing indices) which are dominating the lower end of the market.

So on that note, I will present a graph
that captures national economic house sales activity superimposed
against the Case Shiller index,  but before I do that let’s laugh at
the NAR’s ex-chief marketing strategist economist…

Publications from Wikipedia

Lereah’s book The Rules for Growing Rich: Making Money in the New Information Economy[5] touting investment in technology company equities was published in June 2000 at the onset of the collapse of the dot-com bubble.

Lereah has produced four titles on real
estate investing. His most recent book, “All Real Estate is Local” was
published by Doubleday in 2007. His 2005 book Are You Missing
the Real Estate Boom?: Why Home Values and Other Real Estate
Investments Will Climb Through The End of The Decade—And How to
Profit From Them
[6] was rereleased in February 2006 as Why the Real Estate Boom Will Not Bust—And How You Can Profit from It.[7] Before departing the NAR, Lereah wrote All Real Estate Is Local: What You Need to Know to Profit in Real Estate — in a Buyer’s and a Seller’s Market in 2007.[8]

NAR chief economist David Lereah’s book[6] in February 2005.

Lereah’s book[7] in February 2006 months before the real estate boom bust.

Lereah’s book on investing in information technology appeared in June 2000 as the dot-com bubble collapsed.[5]

Now, let’s put this all together to see
what we get (reference each date above to the chart below.
Unfortunately, I did not chart the dot.com bubble crash, which Mr.
Lereah so accurately timed to the contrarian side :-) (literally, almost to the month), so we will have to leave that one out…


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

Click here to subscribe

And now for the myriad, and may I add, requisite, “I told you so’s”. Subscribers can feel free to click the various download links to review the relevant models, reports and analysis:

3rd Quarter in Review, and More Importantly How the Shadow Inventory
System in the US is Disguising the Equivalent of a Dozen Ambac
Wednesday, November 10th, 2010: All paying subscribers can download the full shadow inventory report here: File Icon Foreclosures & Shadow Inventory. Professional and Institutional subscribers should also download the accompanying data and analysis sheet in Excel – Shadow Inventory.

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

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

Reggie Middleton on Financial Survival Radio: Important Little Details Left Out of the Case-Shiller Home Price Index Saturday, October 30th, 2010

Click here for an interview I did with Financial Survival Radio

Financial Survival Podcast – Reggie Middleton Reveals the Nasty Little Detail Left Out of the Case-Shiller Home Price Index

Related links:

The Truth Goes Viral, Pt 1: Housing Prices, Economic Sales and the State of Depression

Why the Case Shiller Index, Although Showing Another Downturn Coming, is Overly Optimistic and Quite Misleading!

Who Blindly Follow Housing Prices Without Taking Other Metrics Into
Consideration Are Missing the Housing Depression of the New

Pay Attention to the National Association of Realtors and Their Chief Marketing Agent At Your Own Risk!

Robo-Signing Mess Is Just the Tip of the Iceberg, Mortgage Putbacks
Will Be the Harbinger of the Collapse of Big Banks that Will Dwarf

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drwells's picture

The WSJ? That would be the same publication that runs articles like this.


They couldn't see the credit crash and depression coming, but at least they've got plenty of room to give free advertising to politically correct troll pieces.

If a person wiped his ass with the WSJ, he'd become dumber (and possibly contract herpes).

razorthin's picture

Awesome.  Thanks, Reggie.

Weisbrot's picture

1>thank you RM

2>we know the WSJ is part content and part show time

mynhair's picture

NAR, Never Allow Reality

Scout6909's picture

Since October, housing prices have accelerated their decline. A home is Scottsdale that sold for $1.4M in 2006 just appraised for $350k. 

The negative wealth effect is "climbing the ladder".  I talk to a lot of people that used to be well off, now, they are on the verge of bankruptcy.  Shocked by what has happened.






wisefool's picture

Right. Audi is running adverts now comparing "old luxury" (Mansion/Benz) to "new luxury" (Audi / freedom to drive to cool landscapes)


When the boomers got on the housing bandwagon they had genuine incentive because they were upgrading from the houses they grew up in: Small, closed floor plans, old pumbing, old wiring. Small towns or manufacturing neighborhoods.

You can put all the granite countertops you want in a suburban home, but unless it has a flying car in the garage, you are not going to convince the next generation to buy them at 10x income, no matter how well the NAR RE agent dresses.

wisefool's picture

Wall Street wanted in on the real estate agent game too. They had the guy who created the first "Mortgage Backed Bond" on CNBC today in his "first ever interview"

Faber said it was the perfect P-train (profit-train) 'cause you could work on something for 3 months, make a ton of money, and then walk away from it with absolutely no responsibility, on an item which is ostensibly the largest investment a person makes in thier life.

So the MBS inventor dude says "yeah, that was part of the problem. Where we go from here is tough to figure out. Housing typically had an investment aspect to it. But you can't tweak the machine too much. If we endup having to reprice housing as shelter, all bets are off"

Which is already happening. I see it as a generational thing. Boomers treasured thier homes, they were a status symbol and place to raise children. GenX'ers Y'ers, etc don't get thier esteem from housing. They value gadgets, cars, lots of college,  free-time and atypical family formation.

Itsalie's picture

Law of averages tells me there has to be some errors either side of the real picture, but that's not what you seeing, its not hedonics, not rounding, not seasonality folks, what you need here is the chinese data syndrome; just subcontract the work out to the central planners, it would be cheaper, and the exact "data" is leaked out at clockwork precision so the markets and MSM can do a good blow job early.

buzzard beak's picture

Hey good going getting on fast money. Give them pampered-ass white boys hell.

Of course the NAR is totally biased. It's a lobbying organization. You expect the AMA to admit the prevalence of unnecessary surgery?

The fault isn't with the NAR really, it's with the media who take its "statistics" at face value. Do you criticize the Dallas Cowgirls for being biased toward the Cowboys? Why would the NAR put out honest data that harms its members' interests? This admitting two years later that it ridiculously underreported the downturn is just what you should expect from the NAR.

geno-econ's picture

Correction from my previous post: we have had racial supression for over 100yrs as well as a Civil war

geno-econ's picture

The housing bubble is also a behavioral case study on many different levels;

   Number of people at lower income levels that are vulnerable to being swindled. Education and advertising a major factor

   At upper level , peer pressure and cocktail circuit plays major role convincing many to upscale and  refinance for purposes of consumption

   At enteprenurial level to outsmart  system by flipping properties and leveraging  residential and commercial properties to maximixe profits

 At senior age level temptation to use reverse mortgages, home equity loans and annuities{not RE related} to maintain life style

It does seem many at all levels lost all  sense of reality and common sense because we have had it too good for too long. The message from Reggie is it will not turn around soon and learn from your mistakes. Yes our policmakers should share some blame but they left town long ago or hired the best lawyers in town. Of coarse there is always Egypt , Tunesia, Libya but their people were never spoiled, just supressed.  Perhaps supression is next for us before the revolution 

Yes We Can. But Lets Not.'s picture

I am selling my home FSBO, using Craiglist and a dollar store sign.  Total cost, $1.05.  Just this past week a couple came by, fell for the house, then mentioned that they had signed with a broker.  Oops.  The broker lost them the deal due to her crazy fee and due to the fact that she proved to be such a galling, lying, incompetent, unprofessional boob, which near as I can tell is generally what the term Realtor is a euphemism for.

I Got Worms's picture

Are you buying a new house with the proceeds or renting? I sold my home of 7 years just two months ago, am renting, and think it was about the best move I've ever made. Will not be buying for quite some time (unless I find a reasonably priced farm with a bomb shelter).

I will say this though, 99% of my decision to sell my house was made after discovering this site and Reggie's posts. I feel the invisible hand led me to ZH...

Stone Street Advisors's picture

Sounds about right.  Realtors are just zero-value-add rent-seeking parasites, and that's being nice.  I'm sure there's about 1 or 2% of realtors that actually know what they're talking about (I know one off the top of my head), but it seems to be the exception, not the rule.

apberusdisvet's picture

By the time the median home price drops to affordable levels for the declining universe that can actually qualify for a mortgage, the vacant housing stock will be so deteriorated that it will have to be bulldozed.

dark pools of soros's picture

yup -  bulldoze the foreclosed dumps, the banks take a loss (whatever that is, i dont think they print that column on their sheets), and everyone bails them out and gets to own a piece of vanished homes!!



Carl Spackler's picture

I wonder if the author of the books Reggie cited drank his own kool aid and is now broke ?!

Stone Street Advisors's picture

I think Lerah knew he was just a marketing machine, not any sort of real economist (and if not, he's seriously delusional).  I think a better question is what % of people decided to buy or sell their homes based on this nonsense BS NAR data.

Mr Lennon Hendrix's picture

Also no doubt it is dubious not ironic that gold/silver/platinum are collectively breaking out as the housing market collapses.  Inversely it works perfectly.  Massive deflation hits the larger populace of Americans, while inflation leaks into the hands of gold and co.  This destroys the wealth of any compitition to the monied class, keeping the playing field "even".

The combination of massive deflation due to the housing crash with an amount of money printing that is equal to the deflation allows the gain to leak into gold et al.  This is steady inflation.

falak pema's picture

The invisible right hand of the market and the corporate lobbying by media for oligarchic masters, to hide the tilted table behind the curtain concocted by left handed shenanigans.

Mr Lennon Hendrix's picture

Reggie and Tyler,

You guys could write/publish a book with this stuff.  In the works?

topcallingtroll's picture

I am thinking optimistically we still have 15 percent to go.

Pessimistically 35 percent.

Nominal of course/p>

Careless Whisper's picture

looks like mister lereah's books are a really good contra-indicator.

most real estate has been tanking, except in manhattan (south of 86th street) which has held up relatively well. any comments on manhattan real estate?




gmj's picture

That's where the plutocrats are concentrated.  Think of Manhattan as a black hole for America's wealth.

Stone Street Advisors's picture

NEWS FLASH: the majority of people who live in Manhattan are nowhere close to plutocrats you moron.

gmj's picture

"The Manhattan ZIP Code 10021, on the Upper East Side is home to more than 100,000 people and has a per capita income of over $90,000.[123] It is one of the largest concentrations of extreme wealth in the United States."


tony bonn's picture

"...I think we are very near to the end of the housing downturn,” Yun said.." as quoting jim cramer.

cramer went on to declare the bottom of the housing market on june 30, 2010. (it could have been 2009) either way cramer is a turd of a carnival huckster.

whatz that smell's picture

welcome to the "new" free market... dancing turd carnival huckster show at 7.

Eternal Student's picture

To answer the original question of: "When Will the Mainstream Media Be Ready To Call The NAR The Sham That It Really Is?", the answer is very simple.

The MSM will do this once the Real Estate Industry quits buying up so many of their ads. Real Estate advertising is big money to the older Media. Pissing off your best customers isn't a good business model.

There's a big difference between real journalism and the corporate media that we have today.

Fuckin Floyd's picture

Sounds like politics. most of the campaign dollars go to the media. lower limits are sorely needed.

Bicycle Repairman's picture

Gonna party like it's 1989!!

Eireann go Brach's picture

Realtors are quite possibly some of the most ignorant human beings to walk this earth, the majority of them have no sales skills, can't count and know nothing else but to tell you it is the best time to buy a home! Many of them would sell a home to their granny even if it was the worst time to do so.

I am more equal than others's picture

.... but they know when the colors are pretty.  6% commission for that?  They only know the color of money and are still part of the problem.  They have the 'favorites' who magically make deals work that shouldn't. 

Stone Street Advisors's picture

They largely only know what the NAR & their firms' tell them.  Its fun going around with a realtor (or worse, a NYC rental broker) and knowing FAR more about a building/neighborhood/apartment than them. 

And by fun, I mean infuriating.  I do to FSBO route.  No reason in the internet age anyone should want to pay a realtor unless I suppose if you're moving to another state that you do'nt know at all.

PulauHantu29's picture

When I started reading their reports backj in 2007 they were so out of whack with what I was seeing as I drove across the country...I am glad some are finally smoking them out. People need reliable data to make informed decisions...not Bogus Numbers.

Stone Street Advisors's picture

I did a similar article with the core-logic data v. NAR, its ridiculous.

I first pointed the nonsense from NAR in 2009 here: http://1-2knockout.typepad.com/12_knockout/2009/01/question.html

Their math just doesn’t add up. Their quarterly % changes don’t match their annual #’s, I mean, that’s BASIC elementary school math! This is why I think their “data” releases are in PDF format and not Excel, to discourage/make it harder for people to analyze their “data.” In their US Economic Outlook December 2008, they have quarterly GDP % changes as 0.90%, 2.80%, -0.30%, -5.20% respectively, and an annual % change of +1.2%.

If you calculate it though, with those quarterly numbers, the annual change in GDP would be -1.96%. Unless I’m missing something, that is a major misrepresentation of basic mathematical fact.

A Man without Qualities's picture

"If you calculate it though, with those quarterly numbers, the annual change in GDP would be -1.96%. Unless I’m missing something, that is a major misrepresentation of basic mathematical fact."

It may be due to seasonal adjustments, so the weighting for Q4 is far lower.  Of course, it's strange how the adjustments always end up being to the upside....

I am more equal than others's picture

One simple word for the number nonsense is 'hedonics.'

masterinchancery's picture

Even Case-Shiller is seriously biased upward, since they uncritically accept MLS data, which frequently does not incorporate the fact that houses have been torn down and rebuilt at great expense, hence the huge "profit" does not exist. I speak from experience.  Also of course, C-S methodology, looking only at resold homes, cherry picks the universe of housing.

falak pema's picture

If you mix a Case-Schiller bubble with a head and shoulders shampoo and then say 'atchoo' to a Laffer curve what do you get in the futures market : a put or a call? It's driving me nuts that so much hard evidence about the past gives me no inkling about the future. It's like the problem of the guy with a hard-on which he could never synchronise with his girl's need for 'hi-ho silver away'. But then he'd never heard of artificial stimulation and she of artificial simulation. They were such a happy couple in their mutual ignorance, achieving a truly undiluted, uninhibited miracle every once in a while.

solgundy's picture
When Will the Mainstream Media Be Ready To Call The NAR The Sham That It Really Is?


only if obumma says they can...

Hugh G Rection's picture

 It's like the problem of the guy with a hard-on which he could never synchronise with his girl's need for 'hi-ho silver away.


I dont appreciate you spreading rumors about me.