Remember about four months ago, when NAR Chief “Economist” Lawrence Yun said this?
You may even say Seattle is underpriced if you believe Seattle is becoming a superstar city. Seattle is underpriced in relation to other West Coast markets.
Well, it seems he has changed his tune ever so slightly. Here’s a more recent quote, from a Forbes article on Monday (emphasis mine):
Yun described the trend [of declining home prices] as a “positive” noting that the areas with recovering planned sales also have high rates of foreclosure. In contrast, sales in areas such as Austin, Nashville and Seattle, where home prices peaked a year ago and continue to hang on, there is no market recovery in sight. Yun said: “Buyers are simply unable able to afford these higher prices.”
Wow. That’s quite a turnaround. I wonder what changed Mr. Yun’s mind?
(Maurna Desmond, Forbes.com, 06.09.2008)
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29 responses so far ↓
1
goin' for it
// Jun 11, 2008 at 11:21 am
Dude. Tim. That pic you put in the story made my day. ;)
2
patient
// Jun 11, 2008 at 11:22 am
Perhaps he has finally realized that unaffordability hurts his very own organization or is that to credit him to much intelligence?
3
S-Crow
// Jun 11, 2008 at 11:27 am
Lawrence has been here on SB reading the blasphemy from:
Steve Tytler.
(Steve, since you are a a member of the media, I implore you to stop making the market worse. Especially your most recent remark about no appreciation for three years “or more.” Because of that remark I’ll never have our office close one of your transactions. Never. I’ll remember your negative sentiment. Plus, all the agents you work with should stop doing business with you. You are single handedly ruining our market. Plus, because Glenn Beck gave you a testimonial on the air, that’s just over the top).
He, he ; ) just teasing.
4
Mike2
// Jun 11, 2008 at 11:54 am
Apparently “superstar” status is a no-go.
There is no other explanation. Yun is a man of his word.
5
rose-colored-coolaid
// Jun 11, 2008 at 11:59 am
Tim, any number of things might have changed his mind. We could all hope that it was the facts. Like the fact that prices are declining in Seattle, and that those declines are accelerating, and that inventory is still increasing simultaneously.
Alternatively:
1) Perhaps a solar radiation flipped a few bits on his brain. It happens on computers (especially those used in space).
2) NAR is running out of funding for their drugging/brainwashing programs. It’s now so bad they can’t even brainwash their spokespersons.
3) This isn’t the same Yun. Either the real Yun was replaced by an alien/robot when he got the top post, and the real Yun has recently killed the impostor to take back his old life, or the real Yun has been replaced by a robot/alien in the last few months.
4) Yun gets his information from one of those online random fact generators. This one spits out a city name, and then either a thumbs up or down. He then has to scramble to explain the machine’s output, regardless of how incredible it is.
6
Slumlord
// Jun 11, 2008 at 12:56 pm
Perhaps reading in the mainstream media will work better if we revise people’s titles. I got a magic decoder in a box of Cracker Jax. Here is what it tells me…
Economist = Propagandist
Analyst = Fortune Teller
Spokesperson = Court Jester
CEO = Delusional Monarch
Keeping these small revisions in perspective will help us see through the spin in real estate and economics news and quoting.
7
MacAttack
// Jun 11, 2008 at 12:58 pm
Meanwhile, down i-5, Legend Homes in Portland goes BK.
8
MacAttack
// Jun 11, 2008 at 1:00 pm
Oh yeah, by the way, your Street of Dreams is broken.
http://www.seattlestreetofdreams.com/20082009showinformation/
Would that now be “The Street of Broken Dreams?” We couldn’t sell any of our dream houses here in Portland, but we still have Kool-Aid, so the show must go on.
9
David McManus
// Jun 11, 2008 at 1:20 pm
Awwww, so said about the Street of Materialistic Dreams being broken!!!
I wonder what’s up with the investigation of those homes that were mysteriously torched a few months ago. I haven’t heard any more on that.
10
deejayoh
// Jun 11, 2008 at 1:41 pm
I am just shaking my head at the spin today on the week to week increase in mortgage applications
Ummm, the basis for comparison - the week ending 5/30 had 4 working days (due to Memorial Day). The week ending 6/6 had 5 working days - so volume was only up 10% on a 25% increase in days to do business.
Where is the good news?
None of the reporting I have seen even caught this basic fact.
11
shawn
// Jun 11, 2008 at 1:54 pm
Yun said: “Buyers are simply unable able to afford these higher prices.”
I have to give him credit, he has that rare uncanny ability to state the obvious.
12
softwarengineer
// Jun 11, 2008 at 2:11 pm
MEDIA LAPDOG
I’m happy the truth gets repressed sometimes, if it somehow delays the inevitable negativity through psychology.
Even Newsweek is reporting a national recession that’s worse than we thought; with high gas prices putting inflation pressures on the fragile economy and no end in sight for 2008. That’s a turnaround too.
13
vboring
// Jun 11, 2008 at 2:14 pm
the real question is, is he changing his tune to try to bring credibility to the NAR or is he preparing to abandon a sinking ship?
chief economist of NAR walks away?
14
Ira Sacharoff
// Jun 11, 2008 at 2:14 pm
Re: Street of Dreams….They don’t have a burning desire to do another one this year?
15
David McManus
// Jun 11, 2008 at 2:21 pm
Re: Street of Dreams….They don’t have a burning desire to do another one this year?
Dang, Ira. That was brutal. ;-)
16
disbelief
// Jun 11, 2008 at 2:33 pm
I’m still betting that the Street of Dreams fire was an inside-job and look forward to more development / news about this.
I disagree with Yun and believe that a market recovery is actually finally in sight. Except my idea of a market recovery involves prices sliding another 15 or 20% so they can start selling again.
17
TJ_98370
// Jun 11, 2008 at 2:39 pm
.
Dilbert
18
shoeb ismail
// Jun 11, 2008 at 2:50 pm
I have been reading this blog for over a year now and this is my first time writing. I must admit you guys were right on. 20-% 30% decline is not unreasobale if you look at the total picture and seattle is not immune. We have been chasing one bubble after another and now the dark markets of oil are going to clean us out for a few years. We are all feeling our standard of living declining.
19
TJ_98370
// Jun 11, 2008 at 3:21 pm
“Markets are becoming aware of the fact that the decline in house prices is not stopping. I have no particular regrets. The housing bubble is not a reflection of what we did, as it is a global phenomenon.”
Alan Greenspan, November 23, 2007
20
Tozour
// Jun 11, 2008 at 3:47 pm
It’s been a great ride for Yun. As the “guru” for the NAR he was paid well to shell out ambiguous information into article in order to provide realtors and real estate agents ammunition to fight against the growing sense of dread most buyers are feeling these days about getting into the market.
Strangely, more then most types of industries, real estate tends to make people lose focus of their most basic tenets of common sense. Questions they normally would ask a tire sales man they avoid in real estate for fear of looking unsophisticated. The whole process is pretty much a scam as it is.
I remember having a real estate agent contact me with a link to that conference a few months back asking if I was up to date on the latest information about the market. It was laughable…I returned a link to the bubble in the reply email.
Strange - He never emailed back… : )
21
TJ_98370
// Jun 11, 2008 at 4:22 pm
I wonder what changed Mr. Yun’s mind?
Info found on the Seattle Bubble blog finally got thru to him! :-)
Go Tim!!!!
22
AndyMiami
// Jun 11, 2008 at 9:11 pm
cannot wait until this dreary June weather is blamed for the continuing decline..oh, gas prices…WAMU at bankruptcy valuation…The main media should be castigated…or castrated…people that I interact on a daily basis ARE STILL IN DENIAL…which will mean when prices really do fall, the PANIC will be more severe than BOSTON and SANDIEGO…I love this June weather…I moved from Miami, and now I know I will NEVER be here long term…where the _ _ _ _ is the SUN…June weather means that prices will fall 40% from their peak…really really…in real terms…really really…BUY NOW…PRICE REDUCED…REPUBLICANS will be re-elected..NUKE IRAN…$200 oil…stop driving…NO MORE SOCCER MOMS…thank god
23
shawn
// Jun 12, 2008 at 12:33 am
AndyMiami,
when I lived in Seattle in the past and I was missing the summer sun, I would take a trip over to Orcas Island or go East a bit over the mountains. I wonder if there has ever been a gauge or reading of a region’s denial, or how to read it, surveys?
24
Mike2
// Jun 12, 2008 at 7:16 am
I admit I’ve never followed the street of dreams much, but is this the first year they decided not to build homes? Did they take a break in the early 90’s downturn?
25
Michael
// Jun 12, 2008 at 11:43 am
It annoys me that they still call Mr. Yun an economist. It is like calling West Side Story a gang documentary. Mr. Yun is simply a Public Relations / Marketing mouth piece. I am looking forward to the current downturn. I have my money safely squirrled away in both China, Europe, and Wall Street and I’ve saved for the bad times.
I think that a good, painful depression, will help the United States in the long term. It will wake us up, lower prices, and create a generation that can help rebuild the United States. This country is a pyramid scheme that needs to come crashing down. Maybe we can even elect a president not a D-list motivational speaker like we usually get.
26
TJ_98370
// Jun 12, 2008 at 1:17 pm
Mr. Yun is mentioned in the cover story of the current issue of Newsweek.
Why It’s Worse Than You Think
….Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that “home sales and prices in most of the country will improve during the second half of 2008.” (Yun is the Little Orphan Annie of forecasters. He’s always sure the sun will come out tomorrow.)….
27
98144 RE Pro
// Jun 13, 2008 at 1:17 am
Remember that our area still has strong fundamentals…Boeing hiring 150-200 people per month in Everett, Google’s new Kirkland campus for 1000-2000, Microsoft still expanding, etc.
There are buyers and sellers out there, making offers on housing–I know, as an industry participant. The stats tell us volume (transaction count) is down a lot, but prices have fallen only a little, if any (definitely nothing like Las Vegas, Phoenix, Florida, etc). What’s this mean?
Here’s an angle to consider:
How many of you think of this as pendulum swings in the market? Real estate markets always run in cycles…and they cycles all have different durations and magnitudes.
Now let’s think about a few of the recent influences on this one…
* Heady dot-com days lead to dot-bombs, but still lots of money to invest…hey, real estate has often been a stable market…let’s throw some money that way!
* Continuing foregn trade deficits leave China, among other countries, with huge US dollar reserves…hmmm…how can they get good returns on their money? why, let’s try wall street!
* So now we have all this money going after too few borrowers (and houses)…guess what…loan prices go down, house prices go up. where next?
By now, you should be getting the picture. There are multiple factors at work here…unrealistic sellers, buyers on the sidelines, and banks now overreacting to the last few years’ excesses.
I have now seen some of the craziest (unexplaininable) actions in the market, and not unethical actions by buyers and sellers but irrational decisions by lenders who have become so risk averse they don’t care if otherwise good transactions fail. Like:
* bank holding up final loan approval (20% down, 800 credit score buyer) because HOA docs weren’t personally signed (they came off a website)
* power of attorney for spouse deemed insufficient by lender for lack of words “sound mind”
* bank rejected closing papers because borrower’s handwritten date didn’t meet someone’s idea of “proper” numbering (who made them the second-grade teacher?)
28
TJ_98370
// Jun 13, 2008 at 11:22 am
…..lenders who have become so risk averse they don’t care if otherwise good transactions fail…..
The pendulum swings both ways. It’s restitution time for recent lack of due diligence.
29
Jackson Wallace
// Jun 14, 2008 at 1:03 pm
I’m a bit mystified at what Macroshaft has got except Xbox and Office. It’s having its lunch handed to it by Apple in the OS/desktop/handheld race. Its true though that Google is doing well, but how will they fare in a down economy? And Boeing, well, I’ve seen that companies fortunes turn on a dime when airlines cancel orders. Airlines are shattering right now, and maybe they do need new efficient jets, but what we really need is electric trains, not jet-fuelled aircraft. The weather in Seattle is a factor, too, though if you have a job and a mortgage, all you can do it take it, and the sunny climes of America are filled with aholes and dying culture right now.
Seattle is still a sanctuary. Eastern Wa is definitely a good respite for sunnier weather. Orcas island? Dont count on it. The San Juans get plenty of rain and clouds.
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