The
National Association of Realtors (NAR) published a statement this week entitled “
Home Sales Expected To Stabilize In The Months Ahead” within which their venerable Chief Economist, David Lereah, spins the data with his characteristically positive outlook.
Apparently, NAR’s position now is that home prices are “stabilizing” and that buyers sitting on the sideline should feel more confident given the market “normalization”.
Well, I guess it’s over. The market has corrected, prices are essentially “normal” so OK everyone back in the pool!! No significant price dips ahead… ALL CLEAR!
What amazes me most about NAR reports is how the media just picks them up and reports them without fully disclosing, or even mentioning NAR’s inherent interest in attempting to spur on buyers.
NAR reports are so focused on positioning; they seem to beg the question “What was NAR’s position last month, last year, etc.?” and have their predictions been accurate over time.
NAR keeps an archive of their public news releases online but the Wayback Machine is possibly a more neutral source as it simply archives exact “snapshots” of websites content over time.
The snapshots for realtor.org are mostly complete though they seem to have ended some time in mid 2005, so for news releases after that point you’ll have to fall back to the realtor.org archive.
Here is a selection of NAR statements published from November 2004 – July 2006: (Note that all quotes were made by David Lereah)
November 5, 2004 - Home Sales Momentum to Carry Into 2005, NAR
“The 30-year fixed-rate mortgage is now hovering close to 5.7 percent, and even thought we’re expecting rates to rise slowly they will stay in a historically low range and a strong momentum of home sales will carry over into 2005.”
December 29, 2004 - Existing-Home Sales Hit Record in November
“Although mortgage interest rates should rise modestly over the course of the next year, they’ll stay low enough to preserve favorable market conditions,”
January 12, 2005 - Historically Strong Housing Market Expected in 2005
“The population has grown, household formation is strong and demographics tell us this trend will continue. In addition, a similar mix of economic conditions expected in the U.S. for the foreseeable future.”
January 25, 2005 - Existing-Home Sales Set Annual Record While December Pace Eases
“There is no sign of a downturn. Home sales will continue at historically high levels, and 2005 is expected to be the second-best year on record for the housing market.”
“Investment opportunities remain for potential home buyers,”
February 15, 2005 - Record Number of Metros Show Double-Digit Home-Price Gains
Lereah said analysts looking for signs of weakness will be disappointed. “In the handful of areas [that had experienced price declines in the past], none had previously experienced rapid price growth,” he said. “In fact, they were all lower-cost areas experiencing one or both of the conditions necessary for temporary price softness – local economic weakness, mainly in jobs, or a large supply of homes available in the local market.”
March 23, 2005 - Existing-Home Sales Slip in February
“The cooling we expect in sales this year means we’ll be transitioning from a white-hot housing market into a very strong market that still favors home sellers, but should become more balanced as the year progresses.”
April 4, 2005 - Pending Home Sales Index Rises
“Although home sales eased in February, housing activity appears to be firming with a modest uptrend in the months ahead,”
April 12, 2005 - Home Sales to Soften With Firm Price Appreciation
“The simple fact is we still have more buyers than sellers in most of the country,” he said. “This supply-demand imbalance is continuing to put pressure on home prices, but we should get closer to equilibrium by the end of the year.”
May 9, 2005 - Home Sales to Benefit From Slower Mortgage-Interest Rate Rise
David Lereah, NAR’s chief economist, said higher oil prices are having a dampening effect on economic growth. “A side benefit is that mortgage interest rates will be rising less than expected,” he said. “The essentially sideways movement in mortgage interest rates recently has defied the consensus of earlier forecasts, with only a modest uptrend detectable over time. The simple effect, in an economy with an improved labor market, is a higher demand for homes.”
May 24, 2005 - Existing Home-sales Rise to Record in April
“When we look at recent job gains, we see all the positive factors coming together to coincide with a powerful demographic demand for housing.”
June 8, 2005 - Home Sales Forecast to Set Record in 2005
“Not only have mortgage interest rates declined, but an expected rise in the second half of the year will be slower than in earlier projections,” he said. “As a result, we now expect to set records for both existing- and new-home sales this year.”
June 23, 2005 - May Sets Second Highest Pace on Record For Existing Home-Sales
“Most of the stars continue to be correctly aligned for the housing market,” he said. “An ongoing problem is the tight supply of homes available for sale, which is pushing gains in home prices.”
July 6, 2005 - Pending Home Sales Index Eases but Historically High
“Pending home sales are at the third highest on record, so we’re looking at a banner year for the housing market,”
July 25, 2005 - Existing Home-Sales Smash Record Again
“We’ve been expecting sales to remain at historically high levels, but this performance underscores the value of housing as an investment and the importance of homeownership in fulfilling the American dream.”
August 23, 2005 - Home Resales Down From Record, Price Gains Continue to Roll
“The level of existing-home sales in July was the third highest on record,” he said. “This is a big number any way you slice it, and housing is continuing to stimulate the overall economy.”
September 1, 2005 - Pending Home Sales Index Slips, Remains High
“The Pending Home Sales Index is at the fifth highest reading on record, meaning we can expect historically high home sales to continue in the months ahead,”
October 25, 2005 - Existing-Home Sales Hold Close to Record
“The underlying fundamentals of the housing market are solid and sales will stay historically strong, but they will trend modestly down from current peaks,” he said. “Masked by the data are early signs that housing is starting to wind down from a boom and will transition into an expansion – in other words, a soft landing.
October 28, 2005 - Home Sales Forecast to Hold Strong in 2006
“We are in the process of setting a fifth consecutive annual record for both existing- and new-home sales, but the market will be coming off of a five-year boom and experience a soft landing next year,” Lereah said. “An uptrend in mortgage interest rates will cause some slowing of the sales pace, but we forecast 2006 to be the second highest year on record and housing will continue to support the overall economy.”
December 6, 2005 - Pending Home Sales Index Show Market Easing
“The drop in pending home sales is an affirmation that we are experiencing a modest slowing in the housing sector,” he said. “The index is pointing to a soft landing for home sales, which will help to correct the inventory shortages that have dominated housing over the last five years. This should restore balance to the market.”
December 12, 2005 - Historically Strong Home Sales Expected in 2006
“The slowdown amounts to a tapping of the brakes on a hot market,” said Lereah. “Home sales are coming down from the mountain peak, but they will level-out at a high plateau – a plateau that is higher than previous peaks in the housing cycle. This transition to a more normal and balanced market is a good thing.”
December 29, 2005 - Existing-Home Sales Trend Lower in November
“The current pace of home sales activity remains historically strong – only eight months have had a higher sales pace,” he said. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.”
January 5, 2006 - Pending Home Sales Index Slowing
“We are clearly experiencing a market transition, moving from a prolonged boom to a more balanced period of sustainable sales,” Lereah said. “In other words, home sales have been peaking for the last five years and we will land on a high plateau in 2006 – a market that will be healthy for both buyers and sellers. Investment fundamentals for housing remain solid, preserving generally favorable affordability conditions while offering solid returns as well as a place to live.”
January 10, 2006 - Housing Market to "Normalize" in 2006
“We don’t need to break a record every year for the housing market to be good – in fact, cooling sales are necessary for the long-term health of this vital sector,” Lereah said. “A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong.”
February 1, 2006 - Pending Home Sales Index Down, But Expectations Up
“Changes in the overall direction of the housing market are akin to a large ship making course corrections – it takes some time for the driving factors to materialize as a change in the sales level,”
February 7, 2006 - Home Sales in 2006 to be Slower but Sustainable
“Right now, home sales are a little lower than projected, but they can be sustained around current levels,” Lereah said. “Sometimes people lose sight of the fact that real estate is cyclical. Even so, sales will continue at a historically high pace with modestly higher interest rates as the year progresses, and 2006 is forecast to be the third strongest year on record.”
March 6, 2006 - Decline in Pending Home Sales Slowing
“This looks like we’re touching down for the soft landing we’ve been expecting,” he said. “We are at a much more sustainable level of home sales now – a welcome cooling from the super-heated conditions that were driving exceptional price gains. This will give people the time to be more thoughtful about a process that is the biggest single investment most of us make in our lifetime.”
March 13, 2006 - Housing Market Readjusting to Normal Balance
“The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they’ve seen in the last five years,” Lereah said. “Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year.”
April 3, 2006 - Pending Home Sales Leveling Out, Market Balancing
“We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations,” he said. “This normalization is healthy because it is taking a lot of the pressure off of the decision process for both home buyers and sellers – pressure that was driving abnormal rates of price growth across much of the country over the last few years.”
April 11, 2006 - Housing Market to Stay on High Plateau
“Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect,” Lereah said. “Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau, meaning this will be the third strongest year on record.”
May 9, 2006 - Housing Market Taking A Breather But Staying Strong
“Coming off a prolonged period of record sales, housing is taking something of a breather this year,” he said. “Even so, interest rates remain historically low, we’ve added about 2 million jobs over the last 12 months and the economy continues to grow – that will sustain healthy levels of home sales in 2006, but they’ll stay below the peaks experienced during the last two years.”
May 15, 2006 - Metro Home Prices Begin to Cool but Appreciation Remains Strong
“With the supply of homes picking up very nicely in many areas of the country, pressure is coming off of home prices,” he said. “By the time we report second quarter data, I expect most areas will be returning to normal rates of price growth in the single-digit range. Consumers generally can expect normal price appreciation for the foreseeable future, providing solid returns over time.”
May 25, 2006 - Existing-Home Sales Slip in April
“Our leading indicator for pending home sales was trending lower, and our forecast model is showing a modest decline for the second quarter with sales leveling out before rising in the fourth quarter,” he said. “Higher interest rates are slowing home sales, but we see this as another sign of a soft landing for the housing sector which remains at historically high levels.”
June 6, 2006 - Home Sales Settling Down and Appreciation Slowing
“In recent years we were occasionally challenged to find appropriate superlatives to describe surprisingly high home sales,” he said. “Now the housing market has cooled, but 2006 is still expected to be the third strongest on record. In this case, experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability. But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable.”
June 27, 2006 - Existing-Home Sales Ease In May
“Overall price appreciation has returned to normal levels as the supply of homes on the market has risen to a balanced range,”
July 6, 2006 - Pending Home Sales Index Leveling Out
“The slight change in pending home sales indicates the market is beginning to level out,” Lereah said. “This is consistent with our forecast, which is showing a soft landing for the housing sector. We are entering the second phase of the transition period from the housing boom, in which sellers are becoming more realistic about their expectations – sales are stabilizing and annual home price appreciation is returning to historic norms.”
The National Association of Realtors (NAR) published a statement this week entitled “Home Sales Expected To Stabilize In The Months Ahead” within which their venerable Chief Economist, David Lereah, spins the data with his characteristically positive outlook. 
