Economists expect the median price of an American home to dip negative for the first time since federal agencies started keeping track of housing statistics in 1950, according to this big story in yesterday’s New York Times. The Office of Federal Housing Enterprise Oversight will release its second-quarter home price report Thursday.
Says the Times:
The reversal is particularly striking because many government officials and housing-industry executives had said that a nationwide decline would never happen, even though prices had fallen in some coastal areas as recently as the early 1990s.
There’s an interesting bit near the end of the piece: an interview with David Lereah. You’ve heard about Lereah; he was until April the chief economist for the National Association of Realtors. And he was widely considered the most prominent housing booster, writing a 2005 book warning consumers they were missing the real estate boom and updating the book in 2006: “Why the Real Estate Boom Will Not Bust.”
But now, Lereah admits his glasses were too rosy:
In an interview, Mr. Lereah, now an executive at Move Inc., which operates a real estate Web site, acknowledged he had gotten it wrong, saying he did not fully realize how loose lending standards had become and how quickly they would tighten up again this summer. But he argued that many of his critics have also been proved wrong, because they were bearish as early as 2002.
“The bears were bears way too early, and the bulls were bulls too late,” he said. “You need to know when you are straying from fundamentals. It’s hard, when you are in the middle of the storm, to know.”
But Lereah’s successor, Lawrence Yun, is nearly as cheery as Lereah once was. NAR released a different report today that said existing home sales were at their slowest pace in nearly five years last month. From today’s NAR release:
Lawrence Yun, NAR senior economist, said the market is holding on despite temporary mortgage disruptions. “Home sales probably would be rising in the absence of the mortgage liquidity issues of the past two months,” he said. …
“Now, it appears that [the Northeast] will be the first region to climb back, indicating that other regions could follow a similar path.”