Speculators In Charge Of This Bubble
There isn't a lot of celebrating at the NAR this morning, or even much discussion in the media of their existing home sales report. For months their economists have predicted sales and prices to 'level off'. Nothing of the sort in April 2005. "Existing-home sales hit a record high in April, defying expectations of a modest slowing trend in 2005, according to the National Association of Realtors."
"David Lereah, NAR’s chief economist, said sales had been expected to hold at high levels. 'A new record is a bit unexpected.'"
How's this for a parabolic move. "The national median existing-home price for all housing types was $206,000 in April, up 15.1 percent from April 2004 when the median price was $179,000. The last time prices rose at a stronger pace was in November 1980 when the median price rose 15.6 percent."
A double digit gain on top of the biggest gains ever, but no 'B' words in their report. They slipped this in at the bottom of the page. "The median existing-home price in the West was $305,000, up 21.0 percent from the same month a year ago."
Does this look like a plateau or a cooling market? Alan Greenspan said recently that only those who bought at the top would get hurt, financially. It looks like there will be many millions of those. And as for the recent warning about risk in lending, there isn't any shortage of that either.