Chief NAR Economist David Lereah has adopted a new metaphor for the housing market. The real estate market has morphed from a balloon, his prior metaphor, into a large ship. I suppose the balloon metaphor was too similar to the bubble metaphor, thus needing to be replaced with something more benign. I’m surprised he didn’t use the words “luxury ship” or “cruise ship”, as both would elicit good feelings in most readers. This newest quote appeared earlier today in conjunction with the terrible December pending home sales index figures.
U.S. pending home sales index drops in December
David Lereah, the group’s chief economist, said pending sales may edge higher in the coming months based on recent mortgage applications data that showed a spurt of renewed interest among homebuyers in response to a dip in mortgage rates.
“Changes in the overall direction of the housing market are akin to a large ship making course corrections — it takes some time for the driving factors to materialize as a change in the sales level,” Lereah said.
David surely seems to be a master of metaphor.. Or is he?
Turns out the housing market may more like a large ship than Mr. Lereah planned for..
Caveat Emptor,
Grim
grim called it the titanic before. i guess they are reading the blog too.
also now that interest rates are going up there will be a rush of buying. with the increased number of homes on the market the market will soar even more. so buy now. do not wait!!
Ha…God next they will tell us that the decrease in home prices will be good because then more will buy later, so buy at a higher price.
Since rates are going up, refinances will drop creating the need to get more loans to make money which will lead to more bad loans, that will need to more foreclosures, that will lead to a gult. Then people will leave NJ and who knows.
Folks, lets watch what the Real Estate Industry folks tell us next.
CDF
anonymous @ 3:54,
Ask and ye shall receive.
Otteau Report – Bergen County Q4 ’05
You can use that to come to your own conclusions on how Bergen will play out. Don’t be misled into thinking some areas will decline more than others, or the other way around.
grim
I actually like the analogy.
Refinancing to reset the clock on teaser mortgages = Rearranging the deck chairs on the Titanic.
It’s not going to stop the ship from sinking.
Mortage rates tick up this week..
Weekly Home Mortgage Rates
Bond yields up rather dramatically the past few days as well..
grim
this more narrative report from Otteau also of interest:
http://www.mercerrealtors.com/ottau_jan06.htm
LOL!
This guy is amazing. Sell his soul for a raise and paycheck.
The number of people he is hurting is enormous.
Some lawyer needs to put a muzzle on this shyster.
Nice catch Grim. The Titanic it is (or will be).
Regarding Bergen County; the area I am in Englewood Cliffs…within a 3 block radius there are 11 finished or nearly finished homes…spec jobs done by Johnny come lately builders. None have sold in well over 12 months.
The $ (risk capital) was easily available to play the “buy the old pos, knock it down, build new , flip it to a sucker, and make a million” plan. The exit for these dummies is nearly closed…I love it. I also suspect there will be some “accidental” fires in unoccupied homes for sale.
Funny. We need a blog devoted just to Lereah called Lereah Watch.
David
Bubble Meter Blog
well, I signed up to two foreclosure listing sites and I am noticing quite an increase in foreclosure listings on a week by week basis.
Most of the listings are in the counties west and south.
These lenders preyed on poor people and gave them unaffordable dreams of home ownership and now it is all crumbling down.
The early ones have been able to dump their unaffordable homes at market prices, even coming away with hefty profits.
I am trying to buy a home, but I think there is still another few months to go before drastic price drops….or at least homes with realistic prices.
Hopefully the captain goes down with the ship.
-Richie
Anyone have any direct knowledge of Wyckoff and Glen Rock? Looking for a starter home in one of these towns and am seeing little activity on the homes for sale in these towns and prices are being reduced every couple weeks it seems. New listings are coming in under 500k which is good news but just curious if this is going to keep declining or this is just a winter thing?
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