NAR Says 2007 Will Be First Home Price Drop Since Great Depression
Thursday April 12, 5:57 am ET
The National Association of Realtors, which frequently trumpets the fact that median U.S. home prices haven’t declined since the Great Depression, said yesterday for the first time that they expect prices to do just that. In February the NAR was still calling for a 1.9% increase, but now says prices will likely drop nationwide 0.7% from 2006 levels — underscoring how quickly housing expectations have changed in the wake of the subprime mortgage fallout. Lenders current hyper-cautiousness means less eligible buyers, and a rise in foreclosures is adding to the inventory of houses in already over-stocked markets. The report said “fallout from the subprime loan debacle” will likely delay a housing market recovery until 2008. The good news: “... inventories remain well below the levels experienced during the last housing downturn in the early 1990s, and supplies are close to balance in many areas.” Separately yesterday, the Mortgage Bankers Association said it was allocating $5 million to combat “a torrent of unfair press” about subprime woes, saying, “Misleading information, often reinforced by vivid and frightening anecdotes, is raising the very real possibility of overzealous regulatory and legislative responses.” The group insists, however, that it doesn’t blame media critics for industry woes. Howard Glaser, former MBA lobbyist, says the campaign shows the organization is out of touch “with the reality of what’s happening in the marketplace.”
Yes, much more accurate.