Big drop in new household formation in Yun's numbers today. And nice to see Yun being called "crafty". He he he.Here's Diana Olick's report:
Existing home sales in May were essentially flat, down just 0.3% from April and down 10.3% from a year ago. Prices also continue to drop for the tenth straight month, down 2.1% and inventories continue to rise, now to an 8.9-month supply. A pretty bland housing report all in all, except for a strange new number slipped into the middle of the report by that crafty NAR Senior Economist, Lawrence Yun. This mention, to me at least, is the real nugget that the 94 talking heads we’ll see on TV today will inevitably miss.
Household Formation. What’s that? It’s first time homebuyers. Whether it’s young professionals, new families, or new investors, none of these people, well, a lot less than usual, are jumping into the market. Household formation is down 70% (!) in the first quarter of this year from last year. On an annualized basis, it’s less than 500,000, which Yun calls, “rare.” You only see that in a real economic recession.
And here's what Yun said:
Lawrence Yun, NAR senior economist, said the market softness is understandable. “I think psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for subprime borrowers,” he said. “Household formation has slowed dramatically since late 2006, implying that many people are doubling-up – they’re adding roommates or moving in with parents.
And here's a website people are using until the housing crash is over
I would much rather couch surf than sink myself into debt(slavery)
ReplyDeleteFrom Salon:
ReplyDeleteLawrence Yun, the staff economist for the National Association of Realtors who has replaced our favorite whipping boy, David Lereah, as the Man Who Must Be Quoted in all stories about the real estate market, complained that the housing market was "underperforming" given what he considered the general overall health of the economy.
"Psychological factors," he said, explained buyer reluctance to jump into the market at the present time.
How Yun and his ilk are able to cite "psychological factors" as the reason for anything is an exercise in tautological meaninglessness that continues to baffle How the World Works. If you're going to blame consumer psychology when the market is headed down, then in all fairness you should blame it when the market is going up. But back in the go-go days, we never heard anyone from the National Association of Realtors say anything along the lines of: "The real estate market overperformed this month, as home buyers, irrationally convinced that home prices would continue to appreciate beyond all rhyme or reason, stepped up their splurging on new and existing homes, rashly confident that they would be able to sell their purchases at a 25 percent markup in just one year."
Psychological factors are always in play, whether a market is going up or down. We've been giving Yun a chance to establish some street cred, but with each whine about buyer psychology, our willingness to give him the benefit of the doubt takes another hit.
I'm sad to say that Yun is a University of Maryland alumni. He will bring great same to terpdom.
ReplyDeleteit's a buyer's mkt if you got cash.
ReplyDeleteprices are dropping fast in the outlying areas. like riverside county,