The Association of Realtors
September 5, 2007
About 10 months ago, the Association of Realtors paid $40MM for a campaign to convince retail buyers that it was the right time to buy or sell a house… as per my doubtful blog post from November 4, 2006.
Today they announced that the seasonally “adjusted index of pending home sales for July fell 16.1 percent from a year ago and 12.2 percent from the prior month”. Hmm, the reason is – according to their chief economist – due to that “mortgages have been falling through at the last moment”.
The real reason we see a drop in the real estate market is that we have reached a point where few are prepared to take the risk of owning a house versus renting. It’s now 40-60% more expensive to own than rent in the US, UK and Australia according to the Economist, the highest it’s ever been since 1989…
As we have seen over the past few weeks, the American Dream has become a nightmare for many folks that trusted mortgage brokers, lenders and real estate brokers. Well, every bubble got it’s own learnings. It’s unfortunate that people’s homes have to be at stake to get people to smarten up.
