Yep, that was the comment of David Lereah, the chief economist of the National Association of Realtors, and the author of the 2005 bestseller, Why the Real Estate Boom Will Not Bust -- and How You Can Profit From It. The news is that the median house sale price was down 2.7 percent in the 4th quarter of 2006 from its year ago level. That's a decline of about 5.2 percent in real terms. While Mr. Lereah is convinced that this price decline (which he insisted would not occur) is a bottom, other analysts might point to the record 2.7 percent vacancy rate for ownership units in the 4th quarter, a rate that is 50 percent higher than the vacancy rate of 2 years ago. (The vacancy rate had never previously reached 2.0 percent.) Other analysts might have also pointed to the fact that the inventory of unsold homes is 25 percent higher than at the same point less year. Other analysts may have also noted that mortgage lenders are sharply cutting back their lending in the wake of soaring mortgage delinquency and foreclosure rates. But readers of the Wall Street Journal wouldn't know this information because the WSJ apparently didn't think it was necessary to speak to anyone other than the chief economist of the National Association of Realtors.
--Dean Baker
