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Nar Pushes For Sales

(The United States housing market has fallen in such a deep slump that it is causing its most recognized and largest association to literally beg people to buy homes. )

While the National Association of Realtors (NAR) is truthful when it tells people that now is a perfect time to buy, the advertisements give off the feel of a national disaster.

Sharon L. Crenson’s article, “Realtors See 'Perfect Alignment' Of Low Interest Rates, Ample Listings,” posted on Bloomberg News November 11, 2006, explains why the NAR is finally resorting to shameless advertising to help support the U.S. housing market.

“‘Right now may actually be one of the best times to buy a home,’ the association said in the first full-page ads in its 98-year history. With ‘interest rates near record lows,’ the ‘large inventory won't last.’”

At least the NAR can promote that the U.S. home buyer has plenty of options. But after the last “boom” from about 2000 to 2005 bared witness to unbelievable price increases that catapulted far beyond inflation, buyers can now take their time and wait for prices and properties to fall into their lap. But the NAR apparently can not wait for buyers to be patient, as the company is publicly displaying panic for the first time in its history of almost 100 years.

“The largest U.S. real estate trade association is spending $1.3 million on a two-week campaign that's running in the New York Times, the Wall Street Journal, USA Today, the Los Angeles Times, the Chicago Tribune and The Washington Post. The ads are designed to entice home buyers as sales have slid, inventories have risen and builders are offering incentives.”

“‘There's a big change in psychology and that's what they're reacting to,’ said Robert Shiller, an economics professor at Yale University, who cut out the ad and showed it to his students. The campaign is a true ‘sign of the times,’ he said.”

This is not to say that the NAR’s fears are not warranted but homes will always sell, they always have. So then, exactly how bad is the current market to warrant the newspaper ads?

“Total existing-home sales, including single-family, townhouses, condominiums and co-ops, dipped 1.9 percent to a seasonally adjusted annual rate of 6.2 million units in September from a level of 6.3 million in August. They were 14 percent below the 7.2 million-unit pace in September 2005, the Realtors group said on Oct. 25.”

The bad news keeps getting worse as home prices have actually been declining. Granted, the declines do not appear to be significant but considering that it is the first time in 15 years that the slightest price decrease has been recorded, the market is struggling and cannot even be saved by inflation.

“Last month, the Realtors said the median price for a new U.S. home probably will dip 0.2 percent to $240,500 in 2006, the first decline in 15 years.”

San Diego recently reported a 5.5 percent price decrease from October 2005 to October 2006.

“‘The market is much better than you might hear or read,’ National Association of Realtors President Thomas M. Stevens said in a statement on the organization's Web site. ‘Consumers should take advantage of this perfect alignment of low rates and extraordinary inventory.’”

Regardless of what Stevens reports, the NRA wouldn’t choose to place full page advertisements on major news papers for the first time in 98 years, now, if the market was fine. Something is aloof.

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