FLASH: American Home Mortgage melts down - stock falls 90%. Lawrence Yun still thinks housing will be fine and dandy.

Lawrence - if people can't get mortgages anymore, who's going to buy some of that record inventory? Come on, you're an "economist" - you gotta understand supply and demand, right?

Right?

American Home plunges on bankruptcy concern - Mortgage lender hires advisers for 'orderly liquidation of assets

SAN FRANCISCO (MarketWatch) -- American Home Mortgage Investment Corp. said Tuesday it has missed margin calls from its lenders and hired advisers to consider strategic options including the liquidation of its assets.

Shares of the company plunged 90% to $1.04 on concern the company may file for bankruptcy protection.

Meanwhile, in LawrenceYunLand:

"We are encouraged that home prices, at least for now, have stopped declining," said Lawrence Yun, senior economist at NAR. "If they were to drop much larger than that, it could tip the economy into recession." The association has predicted that existing home sales will fall by 1 to 2 percent in 2007.

From HousingPANIC: Real Economist (NOT Lawrence Yun) Quotes of Brilliance

"No one is buying into their Kool-Aid; that's why prices are falling"

- Paul Kasriel, chief economist with Northern Trust in Chicago, questioned the Realtors' assessment that this is a good time to enter the market, saying weak sales and prices suggest that potential buyers are smart to be sitting on the sidelines right now.

Lawrence Yun says potential homedebtors are getting "mixed signals, causing them to hesitate". Let us help clear that up.

POTENTIAL HOMEDEBTORS - FOR THE LOVE OF GOD AND ALL THAT IS HOLY, DON'T EVEN THINK ABOUT BUYING A RAPIDLY DEPRECIATING HOME. THIS MARKET CRASH WILL TAKE YEARS TO PLAY OUT

-Sincerely, your friends at LawrenceYunWatch

Yun: "buying conditions remain favorable for long-term home buyers"

Lawrence Yun, NAR senior economist, said some consumers are uncertain.

“Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate,” he said.

“Mortgage interest rates have risen recently, and tightening lending standards are continuing to hamper sales, but fewer risky loans will put the market on a healthier path. Although general buying conditions remain favorable for long-term home buyers, it appears some buyers are looking for more signs of stability before they have enough confidence to make an offer.”

According to Yun, and the shills at the NAR, it is always a good time to buy! Buy, Buy, Buy!

Lawrence Yun points out that a 70% crash in new household formation is "very unusual". Nice job Larry! Master of the obvious!

When homes get so expensive that nobody can afford a home, guess what?

New household formation plummets and home prices crash.

Ya gotta wonder if Lawrence Yun ever actually took an economics class. I have my doubts...

The number of people who are moving in with friends or family, or sharing apartments or houses to save money, has caught economists at the Realtors association off-guard. The growth in "new households" — first-time buyers or first-time renters — has plunged 70% from last year's rate.

"This is very unusual," says Lawrence Yun, the NAR's senior economist. "Even during a recession, household formations do not slow to this current level."

Yun says rising apartment rents will create housing turnaround in 2008. Not a chance in hell Larry, and you know it

The US home vacancy rate is soaring like never before, as millions of unwanted and unneeded homes pile up and desperate homedebtors look for renters.

Rents will tumble, and Lawrence Yun is as much an economist as George Bush is a scientist.

Home builders are suffering right now. But Yun says that means they'll slow construction and remove the excess inventory that's depressing prices. He says new buyers are moving into the pipeline, too.

Lawrence Yun: We have seen rising apartment rents, so that is beginning to squeeze those people who are renting. Also at the same time, we have seen rising mortgage purchase applications.

The Confused Lawrence Yun's quote of the day

''Housing will continue to be a drag to economic growth all the way through 2008"

LA Times real estate writer destroys Lawrence Yun and the NAR

Nice to see the MSM sounding more and more like housingpanic and bubblemeter... and lawrenceyunwatch!

Realtors Blame Media for Housing Slump

Oh, now we understand. This entire slowdown in home-buying, the collapse of the subprime lending industry, the surge in bankruptcies, it's our fault -- bloggers and journalists made this happen.

This, at least, is the thrust of an essay by Lawrence Yun, the senior economist for the National Assn. of Realtors. Read the whole thing here. Highlights:

"To a great extent, we can thank steady media coverage of the real estate market “correction” for unfounded consumer concerns.... But there’s no real correction where consumers are concerned. Yes, home price appreciation has slowed considerably, and nationally we’re expecting a price drop of 1% for 2007. But that drop comes at the tail end of a five-year spurt that increased home prices by 53%. We may have taken one small step back, but that’s after taking 53 steps forward."

More: "When today’s consumers look at real estate markets, they need to use the same analytical approach as investors in the stock market. Those buyers aren’t generally concerned about the volume of stock trades on a given day. Why should they be? They’re focused on price trends. And by that measure, now is a great time for consumers to be in the housing market: Prices have steadied, and inventories are healthy."

Yun replaced David Lereah, who was widely criticized -- ridiculed is more accurate -- on blogs for being a cheerleader for the housing bubble. This essay will earn Yun similar attention -- in fact, there's already at least one blog dedicated to yun-watching, www.lawrenceyunwatch.blogspot.com.