NAR is Fooled!
Posted: Wed Nov 14, 2007 1:36 pmCharting the Housing Spin
By Seth Jayson (TMFbent) November 14, 2007
Again with the NAR
In an article earlier today, I pointed out that the National Association of Realtors is sounding desperate these days. The 6% home-sale skimmers are taking pains to make housing look like a good "investment," even though the NAR's own predictions call for a worsening market. In its latest press release, NAR Chief Economist Lawrence Yun, the trade group's new and improved David Lereah, tries to argue that homes are better investments than stocks. I won't take too much time to point out how specious his argument is, beyond pointing out that stocks, unlike homes, operate on a highly liquid market.
Moreover, they pay dividends, they don't require thousands of dollars in yearly maintenance and property taxes, and finally, let's note that Yun's bogus return rate for housing depends entirely on the leverage people use to buy homes. Buying stocks with major leverage would boost returns far beyond the alleged payoff from a home. But that, of course, would be a risky thing to do -- just like buying an expensive home at the top of a market with no money down and an ARM, as so many Americans did over the past couple of years.
Numbers don't lie, unlike the writers of some press releases
But back to the NAR's numbers. The organization that thinks it's always a great time to buy nevertheless doesn't seem to feel like it's ever a good time to put its sales predictions in context.
I'm here to help the NAR out, and by "help," I mean "illustrate, in the NAR's own words and figures, how the trends in its predictions makes its look downright ridiculous." Let's start with existing home-sales predictions.
..continue
http://www.fool.com/investing/general/2 ... -spin.aspx
By Seth Jayson (TMFbent) November 14, 2007
Again with the NAR
In an article earlier today, I pointed out that the National Association of Realtors is sounding desperate these days. The 6% home-sale skimmers are taking pains to make housing look like a good "investment," even though the NAR's own predictions call for a worsening market. In its latest press release, NAR Chief Economist Lawrence Yun, the trade group's new and improved David Lereah, tries to argue that homes are better investments than stocks. I won't take too much time to point out how specious his argument is, beyond pointing out that stocks, unlike homes, operate on a highly liquid market.
Moreover, they pay dividends, they don't require thousands of dollars in yearly maintenance and property taxes, and finally, let's note that Yun's bogus return rate for housing depends entirely on the leverage people use to buy homes. Buying stocks with major leverage would boost returns far beyond the alleged payoff from a home. But that, of course, would be a risky thing to do -- just like buying an expensive home at the top of a market with no money down and an ARM, as so many Americans did over the past couple of years.
Numbers don't lie, unlike the writers of some press releases
But back to the NAR's numbers. The organization that thinks it's always a great time to buy nevertheless doesn't seem to feel like it's ever a good time to put its sales predictions in context.
I'm here to help the NAR out, and by "help," I mean "illustrate, in the NAR's own words and figures, how the trends in its predictions makes its look downright ridiculous." Let's start with existing home-sales predictions.
..continue
http://www.fool.com/investing/general/2 ... -spin.aspx