Could Realtors economist Lawrence Yun please stop talking?
With the housing bubble that the National Association of Realtors spent years denying the existence of crashing down, the association's Chief Economist is now calling on Congress to prop it back up.
In a column titled We Need a "Jolt" Now, Yun essentially makes the case that interest rate cuts, tax incentives, and increased FHA lending are simply not enough to bring the real estate market back. The market share of FHA loans has soared from 2% in 2006 and is expected to top 30% in 2009. But no, the federal government needs to do more. Yun writes that "If we have a properly structured housing-focused stimulus plan, once it is enacted I suspect that home sales could increase 10 percent – perhaps even 20 percent – nationwide. That would immediately bring down inventory levels and thus stabilize home prices."
Of course a 20% sales increase would also pump cash into the coffers of the NAR's members, but no need to mention that. The important thing to remember when looking at Lawrence Yun's suggestions and predictions is that he has never been right. Watch this video if you don't believe me.
Given his abysmal track record, you'd think that Yun would stop talking -- or at least change his tune. The problem is that he can't. As former NAR economist David Lereah told The Wall Street Journal, the NAR puts tremendous pressure on its economists to tow the party line. They are essentially glorified PR people paid large amounts of money to use their academic credentials to impute credibility on a trade organization's agenda. If prostitution is illegal, why haven't we seen Dr. Yun on an episode of COPS?
The sad thing is that the NAR may very well get its wish, as it is one of the most powerful lobbying organizations in the world, weighing in as the third largest campaign contributor of all-time. That should give Yun and his proposals a woefully undeserved seat at the table.
Finally, it should be noted that the blame that should be bestowed on Yun and the NAR should not be extended to the real estate agents themselves. Many of these people work hard and do look out for their clients' best interests.