Housing Doom Housing Bubble Blog

Every now and then I find a comment on the Yahoo "Gossip" Boards too good not to share.  This is from crazy1090631: [slightly edited]

So I met this realtor last night while walking my dog. He is a nice guy. We started talking about inventory and prices. He actually said, "Inventory is building all over and nothing is selling, but the prices won’t go down." I asked the guy if he understood macroeconomics, supply and demand, and the recent debacle at Bear Stearns concerning derivatives. The guy knew nothing at all.

I then asked him, "SO prices won’t go down much?"

He said, "No they will not."

I said "What happens if lenders tighten up, the bond market crashes as a result of the dollar crash since we are at long term dollar support right now, which will result in rates that will choke a mule, say 15%."

He laughed at me and said, "They don’t make any more real estate".

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You wouldn’t expect sales to keep dropping in the summer.

What’s a RE shill supposed to do?  How do you spin these numbers, just released from the National Association of Realtors? (NAR)

Pending sales of existing homes dropped to their lowest level in almost six years, a real estate trade group said Tuesday, demonstrating the persistence of the housing slump.

The 3.5 percent decline in May, compared with the previous month, follows a drop of 3.4 percent in April and a 4.5 percent dip in March. It leaves the National Association of Realtors’ index at its lowest point since September 2001.

The actual index was at 97.7.

Month-to-month is down- so much for pushing the  seasonal spin.  Year-over-year, the drop is worse - the 13.3% decline is worse than last year’s 9.2% drop. That means the spin masters can’t say how this year is only awful only in comparison with 2005.  Here’s the charts:

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We’ve read about how housing’s downturn has negatively impacted homeowners, investors, real estate agents, mortgage lenders and Wall Street, but Doom has heretofore overlooked the potential impact on real estate gurus.  Consider the case of poor J. Michael Ledman:

J. Michael Ledman nurtured the smooth-talking image of a savvy and successful real estate investment guru.

He solicited investors on his Web site. He charged $2,900 and up per person for how-to training. He ran ads in the Yellow Pages and in the newspaper. And he dished out advice on his weekly radio show about everything from credit scores to how to buy and sell distressed property with no money down.

But a year ago, the bottom fell out.

The investment guru who taught others how to profit from foreclosures is himself facing serious financial and legal woes.

How did this happen?  According to Ledman:

He blames the collapse of the real estate market, which caused profits to fall, overhead to rise and investors to run for cover.

"Have I got myself in a pickle? Sure, I have," Ledman said in an interview, but he added: "I’m not ready to throw in the towel."

Ledman may not have any choice:

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