Some folks may have caught the NYT headline on an article reporting on March existing home sales, "Sales of Previously Owned Homes Plunge to 1989 Level." This is a case of headline writers gone wild. The point that he/she was trying to make is that this was the sharpest one month drop in home sales since 1989, which was reported correctly in the third paragraph. In spite of the drop, sales continue at an extraordinarily high rate, although they are down by more than 15 percent against their 2005 peak. The NYT piece deserves credit for not buying the line circulated by 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, that the drop was due to the weather. Sales fell by more in the West than in the Northeast. It's hard to believe that bad weather in the West lowered sales in March.
--Dean Baker
