A new report out
on the housing market says that the "pending home sales
index" is now at it's lowest level in nearly six years. That
doesn't sound great, but I have to admit that when I first
read that story I was a little surprised. I mean, six years;
that's it? I thought things were really bad right now?
They are. The Real Story is that, once again, statistics
don't lie, but housing-market liars use statistics.
There are three big problems with the story I just told you
about. First, the only month on record that was worse than
last month was September, 2001 -- how many people do you
know were buying houses that month? Second, the reason why
last month was only, quote, "the second lowest ever for the
index" was because the INDEX WAS JUST STARTED IN 2001! Kind
of important information, don't you think?
The third problem with this story is it's source: the
National Association of Realtors. Guess what -- they're
biased! They want prices to go up! There's nothing wrong
with that, but it's like hearing a story that doughnuts are
good for you and not being told that it was written by
Krispy Kreme.
For years, the Realtor's Association's chief economist, a
guy by the name of David Lereah punched into work every day
and dutifully toted the company line in the media about how
great things were. Here are some of his best, notice how he
continues to be optimistic even as the market is crashing
around him.
*August 2005: "All of the doom and gloom forecasts of a
housing debacle are not only irresponsible, but also
downright wrong."
*December 2005: "We are really on track for a soft landing.
There are no balloons popping."
*January, 2006: "…sales activity is now at a sustainable
level and is likely to pick up in the months ahead."
*April, 2006: "…this will be the third strongest year on
record."
*October, 2006: "The worst is behind us…"
*February, 2007: "2007 promises to be the fourth best year
on record."
I wish I could give you more of his greatest hits from this
year, but sadly, Mr. Lereah left the Association in May.
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