Lawrence Yun, the latest economist tool, employed by the National Association of Realtors put the usual positive spin on the horrific housing market this morning. He is crying about unfair appraisals slowing down the housing market. I guess it isn't like the good old days where the lender would threaten the appraiser if they didn't get the number they wanted. Larry prefers fraud to honesty. Fraud generates so much more in commissions for his realtor bosses.
The green shoot crowd should take a look at the charts below. Existing home sales are pacing 33% below the 2005 peak with absolutely no indications of going up. They are at 1998 levels and will probably stay at this level for years in the best case scenario. A possible scenario is another 20% down to 1995 levels when the next round of foreclosures hit in 2010 and 2011. At least 1.5 to 2 million homes need to be taken out of inventory to get to a normalized level. Months supply of 10 months needs to be cut in half to 5 months to be at a normal level. These adjustments will take at least two more years. There is no housing rcovery folks.
Distressed properties, which declined to 33 percent of all sales in May from 45 percent in April. Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”
![[EHSMay2009.jpg]](http://1.bp.blogspot.com/_pMscxxELHEg/SkDlRIiK6vI/AAAAAAAAFnc/wA7a-SJCcyg/s1600/EHSMay2009.jpg)
![[EHSMay2009Inventory.jpg]](http://1.bp.blogspot.com/_pMscxxELHEg/SkDmzWgd0iI/AAAAAAAAFns/CAuY04zglaI/s1600/EHSMay2009Inventory.jpg)
![[EHSMay2009Months.jpg]](http://3.bp.blogspot.com/_pMscxxELHEg/SkDnep5Kl4I/AAAAAAAAFn0/MUFIe2gwIyk/s1600/EHSMay2009Months.jpg)
4 Comments
JoshPowered
Great post Jim, I agree that the predictions are way to optimistic. Just looking at the difference between sales and inventory shows an obvious rift still exists. The fall from the bubble burst may have slowed, but all of the air needs to come out of the bubble before there will be stabilization.
Madman
Unfair appraisals? Yun is obviously a moron. Houses arent worth as much as they were if they're surrounded by a bunch of forclosed homes. The real slow down on financing is at the banks. They're taking money on loan applications even when they know the loans wont happen.
paonejim
Back in 2007 Yun addressed more than 200 people at the Orange County Association of Realtors headquarters in Laguna Hills “Whatever I say, I take full responsibility for everything I do." Are you going to take responsibility and resign? You are a discredited shill for the Realtors and have been made many predictions that were way off. Another example of his ineptness, July 2008 Yun stated "I think we are very near to the end of the housing downturn." Yun also was the deck hand on the Titanic, signing passengers up for shuffleboard as the ship was sinking.
jlounsbury59
Jim - - -
Great data presentation. I expect to have a housing market review article out in a week or so and would like to reference your charts. Will you get them in a Seeking Alpha article? If not I will reference them here.
By the way, Jim there is an obvious question: Are houses worth more than they are selling for? If so, then Yun is correct. But then you would have ask why these underpriced houses are not being snapped up. I think Yun needs to receive some training in the concept of "willing buyers and willing sellers".