Last week for Op-Ed Friday, I posted a graph of the NAR’s predictions for home price appreciation through the second quarter of 2008. The graph looked like this:
This week however, the NAR came out with a different set of predictions, and the graph looks like this: [I can’t find the data for last weeks chart on the website now- the chart with the new data replaced the old one.]
It’s not clear why there was a revision of 2006 numbers-it seem like it shoud have been easy to project 2006 numbers in 2007!
According to Seth Jayson at Motley Fool: [Hat tip L!]
You just know the housing situation has gotten bad if the six-percenters at the National Association of Realtors finally feel the need to reveal the awful truth: Prices are going to fall. The latest verbiage from the world’s most vocal housing-bubble cheerleader, NAR economist David Lereah, actually predicts that home prices will drop by 0.7 % in 2007.
There’s nothing wrong with revising a prediction- I’ve had to adjust a projection or two as more data came available or circumstances changed. Lereah’s propensity for declaring a new market "bottom" every month, though, makes this particular serving of his "humble pie" sweet to the rest of us.
In spite of the downward revision, a lift in the second half the year makes very little sense, given the slow state of the market. Expect another downward revision at some point, and when Lereah changes that prediction, I’ll still be here with a copy of his old one.