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  • From: Gene GeRue <genegerue AT ruralize.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Home appreciation forecast at 6.4 percent for 2006
  • Date: Fri, 14 Apr 2006 07:38:15 -0500


Notice that the source of the view the housing market is still
all roses is the NAR. Don't suppose there's any whistling past the garveyard going on here, now do we?

Fair question. I have about 35 years history with NAR. My observation is they have the best collection of facts on the housing market in the USA and their forecasts are dependable. NAR would lose hard-won credibility if they padded numbers. There is no incentive to do so. NAR is relied upon for real estate facts by many groups of people.

The National Association of Home Builders may have a superior data base of new house permits and completions, but Realtors typically sell new homes as well as existing. The Mortgage Bankers Association has superior numbers on numbers of mortgage aps and closings. All three organizations are useful.

That said, it is apparent that I have not yet impressed upon you the importance of unique local conditions. What's happening in Phoenix is not happening in Philadelphia. The housing market is subject to LOCAL supply and demand. Population growth, job growth, interest rates and housing supply all affect individual markets. One reason I have decried the bubble talk of the last couple years is because it is based on selected state or local markets that are then extrapolated to indicate a national condition. That is unreliable at best. Many self-proclaimed experts have looked at Las Vegas or parts of Florida as proof of impending disaster. Both those places are now in the process of adjusting to local conditions; neither has ever been indicative of national trends.

The term "bubble" is simply not appropriate. A bubble is pricked and it bursts immediately. It is absurd to assess the national real estate market as such. Local real estate markets continually adjust to local conditions in far less sudden movements.







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