Dueling chief economists

What do the realtors know that the home builders don't? Or is it vice versa?

By Andrew Leonard

Published July 18, 2006 7:17PM (EDT)

The National Association of Home Builders reported today that home-builder confidence has sunk to a 15-year low. The bleak assessment "reflects growing builder uncertainly on the heels of reduced sales and increased cancellations related to eroding affordability as well as an ongoing withdrawal of investors/speculators from the marketplace," said NAHB chief economist David Seiders in a press release.

So much for your soft landings. What, I wondered, would the National Association of Realtors have to say about this glum news? Strangely, there was no acknowledgment of the home builders' announcement on the realtor.org Web site. But there was a forecast, dated July 11, that calmly predicted "Home Sales Expected To Stabilize In The Months Ahead." According to David Lereah, NARs chief economist, "The major housing indicators have been moving up and down within a reasonable range, which means the market should even out just below present levels," he said. "At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate. We should see home sales rise and fall month to month, but dont look for any big shifts one way or the other."

Who to believe here? The builders, who are watching the floor fall out from under them, or the realtors, who always can be counted on to put on a happy face, no matter what the news is?

I may be going out on a limb here, but I think if I had to choose between chief economists named David to back me up in a dark alley, I'd going with Seiders over Lereah, every time.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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