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Wednesday, July 11, 2007

Those Wacky NAR Forecasts

by Calculated Risk on 7/11/2007 12:35:00 PM

Another month, another downward revision to the NAR forecast for 2007:

Feb 7, 2007: Existing-Home Sales To Improve, With Later Recovery For New Homes

Existing-home sales ... are forecast at 6.44 million in 2007
April 11, 2007: Tighter Lending Standards Good For Housing, But Will Dampen Sales
Existing-home sales are likely to total 6.34 million in 2007
May 9, 2007: Housing Forecast Changed Slightly Due to Impact From Tighter Lending
Existing-home sales are likely to total 6.29 million this year
June 6, 2007: Home Sales Projected to Fluctuate Narrowly With a Gradual Upturn
Existing-home sales are projected to total 6.18 million in 2007
July 11, 2007: Home Prices Expected to Recover in 2008 As Inventories Decline
Existing-home sales are expected to total 6.11 million this year
The NAR forecasts are too optimistic, and the headlines are hilarious too (see Nutting's comment on the current headline below). My forecast is still for 5.6 to 5.8 million existing home sales in 2007.

Rex Nutting at MarketWatch on the current NAR forecast: Single-family starts to fall again in 2008: Realtors
Construction of single-family homes will probably decline for a third straight year in 2008, according to the latest monthly forecast from the National Association of Realtors.

The group's July forecast, released Wednesday, is more pessimistic than its June forecast in nearly every aspect.
The realtors' press release was headlined "Home prices expected to recover in 2008 as inventories decline" -- even though the forecast median price for existing homes in 2008 was unchanged from last month's at $222,700.