I couldn’t believe what I was seeing. On Friday, the U.S. National Association of Realtors placed full pages ads in popular newspapers such as The Wall Street Journal and U.S. Today with the headline: “It’s a great time to buy or sell a house.” Do they know what they are talking about or are they that desperate to drum up business for their realtor members? A shrewd consumer must wonder.
When you read the copy of the display ad, and even though the title says “It’s a great time to buy or sell a house,” the ad doesn’t address sellers, it only mentions why people should buy houses. Here’s what the ad claimed, with my responses in brackets:
Low interest rates offer buyers a “once-in-a-lifetime opportunity.” (That’s if you believe inflation will stay in check and the U.S. dollar won’t collapse.)
The greatest inventory of homes for sale in years offers consumers a great number of choices. (But if consumers wait, the inventory of homes, and thus the selection, might actually increase.)
Prices have stabilized. (Nothing could be further from the truth. The median price of a home sold in the U.S. in September fell 2.2%–the biggest year over year price drop since 1968!)
The outlook is for home price to rise in 2007. (I’d like to see that study. Most forecasts are calling for a very soft realty market in 2007–some analysts are expecting big trouble for housing next year.)
Alan Greenspan recently said that most negatives for housing are likely behind us now. (Greenspan created the bubble in housing that grew greater than he anticipated. Now he’s telling us the worst is over. Gee, I didn’t know boom in busts went that quickly. You be the judge on Greenspan’s comments.)
It’s irony is that in the same Wall Street Journal edition that carried the unprecedented full page ad by the National Association of Realtors, there was a feature article discussing the record number of people backing out of contracts they’ve entered to purchase homes. The article quotes a Washington, D.C. housing conference that took place last week where it was reported builders are experiencing a cancellation rate on contracts for new homes of about 40%–twice last’s year’s rate.
If I didn’t know better, I’d think realtors are getting desperate for business to pick-up.