I almost miss David Lereah. He was the former chief economist for
the National Association of Realtors (NAR), and author of many fabulous books on how to lose all your money in Real Estate (as well as Tech/Telecom/Internet stocks). Since Housing peaked in
August 2005, we could always count on Lereah for some utterly ridiculous economic absurdity, explaining why the Housing numbers really weren’t
that bad, and why the-bottom-was-in !
Sheer, delightful idiocy.
It was great theater. Each month the NAR could be counted on for denial, cheerleading, and blind stupidity. When the NAR ended
up with a new, somewhat less-hallucinogenic chief economist, I was actually a
Well, cheer up kids! At least a little of the ole psilocybin may be back in the NAR drinking water. This month, they served up the following delightful headline:
And ya know, these problems ARE "temporary." Thanks to the entropy of the universe, eventually all real estate will disappear as the universe eventually succumbs to its own mortality (heat death). So if you want to be technical about it, all problems are temporary. Thank you, Lawrence Yun, for that bit of existential insight.
Where was I? Oh, yes, real estate.
What did this month’s NAR report have to say?
• Mortgage availability problems peaked in August (How they know this, I cannot say. But if they said it, well, there’s a chance its true: A very, very small chance).
• There were unusual disruptions in the mortgage market. (Really? I must have issed ‘em)
• We saw a fairly high number of postponed or cancelled sales. (I guess this must be a fairly new phenomena)
• Lower sales contributed to a buildup of unsold inventory. (duh)
• The NAR expects similar results for home sales in September.
Sow while the NAR cannot help themselves but spin the data somewhat — a flack is a flack is a flack — they are no where near Baghdad Bob’s levels.
Of course, most sober commentators who reviewed the data were much more circumspect. Our own response to this week’s utterly dreadful Housing
datapoints were of that ilk:
But to really get a sense of how poor the data was, check out what Floyd Norris wrote in the NYT today:
"With sales of both new and existing homes down, more homes are now on the market than ever before — almost 4.5 million, a figure that is nearly double the number in early 2005, when prices were rising and home builders were reporting high profits.
And many of those homes have been on the market for a while. Of the 178,000 completed new homes that were available for sale at the end of July, fewer than 15 percent found buyers in August. That was the lowest rate in more than a decade.
In late 2006, it appeared that the housing market had stabilized after falling, with new homes selling at a seasonally adjusted annual rate of about one million, and investors bid up the price of home builder stocks.
But with all the bad news, those prices have fallen to new lows. The pace of new-home sales in August was just 795,000, a seven-year low."
But the money shot is the accompanying graphic:
graphic courtesy of the NYT
By late 2008, or even 2009, we should Housing more "normalized. But between now and then, we should expect to see prices drop more, until much of the huge inventory build gets worked off. For those of you who put more faith into futures markets than I do, note that prices aren’t shown bottoming until 2010.
Temporary? I guess if your definition of temporary is a few years, well then yeah — its temporary. But so is everything else . . .
August Existing-Home Sales Fall on Temporary Mortgage Problems
NAR September 25, 2007
For Housing, the Summer of the Unsold
NYT, September 29, 2007
Here’s the Ubiq-cerpt:™
"It’s a classic tale of failure and redemption, the kind of story Hollywood
loves to tell.
Fresh off his second successful movie, an up-and-coming director takes a
chance on a dark tale of a 21st-century cop who hunts humanlike androids. But he
runs over budget, and the financiers take control, forcing him to add a
ham-fisted voice-over and an absurdly cheery ending. The public doesn’t buy it.
The director’s masterpiece plays to near-empty theaters, ultimately retreating
to the art-house circuit as a cult oddity.
That’s where we left Ridley Scott’s future-noir epic in 1982. But a funny
thing happened over the next 25 years. Blade Runner’s audience quietly
multiplied. An accidental public showing of a rough-cut work print created
surprise demand for a re-release, so in 1992 Scott issued his director’s cut. He
silenced the narration, axed the ending, and added a twist — a dream sequence
suggesting that Rick Deckard, the film’s protagonist, is an android, just like
those he was hired to dispatch.
But the director didn’t stop there. As the millennium turned, he continued
polishing: erasing stray f/x wires, trimming shots originally extended to
accommodate the voice-over, even rebuilding a scene in which the stunt double
was obvious. Now he’s ready to release Blade Runner: The Final Cut,
which will hit theaters in Los Angeles and New York in October, with a DVD to
follow in December.
At age 69, Ridley Scott is finally satisfied with his most challenging film.
He’s still turning out movies at a furious pace — American Gangster,
with Denzel Washington and Russell Crowe, is due in November — building on an
extraordinary oeuvre that includes Alien, Thelma & Louise,
Gladiator, and Black Hawk Down. But he seems ready to accept
Blade Runner as his crowning achievement. In his northern English accent, he
describes its genesis and lasting influence. And, inevitably, he returns to the
darkness that pervades his view of the future — the shadows that shield Deckard
from a reality that may be too disturbing to face."
Other goodies: An interactive look at the Cultural Influences Before and After the Film in the Blade Runner Nexus , and a full transcript and Audio of Wired’s Interview with Ridley Scott.
Its a must read for fans — even if Ridley gets whether Deckard is a replicant or a human wrong . . .
Q&A: Ridley Scott Has Finally Created the Blade Runner He Always Imagined
By Ted Greenwald 09.26.07 | 4:00 PM