In all this talk about the housing market in recent weeks; the continued decline in home prices; the double-dip in the housing market, Realtors have remained frustratingly disconnected with the facts and the marketplace perceptions surrounding all this apocalyptic reporting. Lawrence Yun, chief economist at the National Association of Realtors, has been particularly off-track, even for him.
Here's a quote Mr. Yun gave recently when asked about what factors buyers should use when making home-buying decisions. "People should base their decision on affordability, lifestyle choices, and home preferences, not on investment" Mr. Yun said.
This comment is so far removed from the mindset of most buyers that it's almost laughable. You can't get more out of touch than to tell home buyers that they should not look at their homes as investments.
Sure, a home is more than just an investment, and a poorly chosen home can be a huge liability to an owner. But it's not like we're buying cars here. The most compelling reason for home ownership is that the home can and should be worth more than what you pay for it - one day. Without this motivator, there is no real advantage to home ownership. Without the prospect for appreciation, buying a home is no more attractive than buying a new car - you may enjoy the ride and it may make you feel good, but there's little financial sense in the purchase decision.
I understand that Yun is paid by the Association of Realtors and his job is to make house buying attractive - regardless of market conditions. But there comes a time when the credibility hit that you take for your "spin" far outweighs the good that you could have done for your constituents. You can tell people that "now is a great time to buy" even in the worst of markets, but eventually the truth becomes painfully obvious. Then you just look colossally ignorant.