David Bracken of the News & Observer reports that now is a great time to buy. (Notice how Bracken quoted only real estate agents in his story. I regard articles printed in the Real Estate section of newspapers as nothing more than paid advertisements of the real estate lobby.)
Damon Darlin refers to advice such as that provided by the real estate agents quoted in Bracken's article as "famous last words."
“IT’S a great time to buy a home.”
Real estate agents were saying that in 2001, as home prices were rising. They also said it when home prices peaked in 2005 — in fact, David Lereah, former chief economist of the National Association of Realtors, published a book that year titled “Are You Missing the Real Estate Boom?”
And many real estate agents said it was time to buy as prices began to drop — and continued to say it over the past several years as prices fell by an average of 33 percent in America’s 20 largest cities.
Mr. Lereah would acknowledge that he had gotten it wrong. But from the perspective of many real estate agents, it is always a good time to buy.
“What they are really saying is that it is a good time to be involved in a transaction that generates a commission,” says Barry Ritholtz, C.E.O. and director of equity research at FusionIQ, a quantitative research firm. He’s also author of “The Big Picture,” an irreverent blog on markets.
I've made where I stand on this issue pretty clear. (And here. And here. And with regards to the perverse incentives of real estate agents and home buyers, this here.)
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