We're still waiting on numbers from the National Association of Realtors that will be released this afternoon. They have decided to combine their pending home sales index with their economic forecast and release it all from their mega-convention taking place in Las Vegas today.
The pending home sales index is based on contracts signed in October, but not closings, so this will be a gauge as to where we are in all the mortgage turmoil, i.e., can you get one.
But I couldn't wait for the release, because I received an email last night from the NAR touting the convention, which is seeing record attendance (30,000). The theme of the meeting is: restoring confidence in real estate. The president of the NAR, Pat V. Combs, "urged Realtors to help restore confidence in the real estate market by educating the public about the value of housing as a good long-term investment." She apparently claims that 2007 is turning out to be "one of the strongest years on record." I don't doubt that, given the record numbers of the last few years that we are comparing it to.
But Ms. Combs apparently went on to say, "Take the time at the Realtors Conference and Expo to consider evidence and gather the information you need to help Realtors in your state refute inaccurate stories and build confidence in the market."
Confidence is certainly key when it comes to probably the most emotional purchase you're every going to make, but fundamentals are as well. I agree that mortgage rates are in the low range, job growth is relatively steady, and the economy continues to chug along despite warnings of recession. But I beg to differ with the Realtors' focus. I think they should be talking about prices, talking about educating their clients as to the complete over-inflation of home prices and what real affordability means.
No amount of shunning media stories or ignoring foreclosure stats can make up for the fact that houses in this country are just too expensive. You want to juice the market? Lower the price. The crazy record appreciation we saw at the beginning of this century was unwarranted and undeserved, and it came darn well close to tanking our entire credit system. That's a cold hard truth and Realtors should educate their clients about that.
Questions? Comments? RealtyCheck@cnbc.com