You might recall that in February, the sale of existing homes across the country rose by about 5 percent.
The media treated this an amazing event. Might the housing industry be nearing a recovery?
Of course, the National Association of Realtors trumpted the news, too, in its own press releases.
One thing, though, was largely missing from all this analysis: Home sales always increase from January to February. And they usually increase by about 5 percent. Now, if something happens every year it's not exactly a big event when it happens again, is it?
The spin from the Realtors Association, though, is nothing new. The association has been spinning for decades. Remember the housing boom? (It seems like eons ago, but it was still going strong through part of 2006.) You might recall there being a pretty feisty debate about whether there was such a thing as a housing bubble. Many financial analysts warned us that not only would housing prices eventually stop rising, they'd probably begin falling, too.
The National Association of Realtors, though, argued vehemently against the existence of a housing bubble. Led by their chief economist, the now discredited David Lereah, officials with the real estate association said that there was no evidence of a housing bubble. They argued that housing prices would continue to rise.
Of course, the association and Lereah were wrong. They were as wrong as you could be. (Unless, of course, you did something as stupid as starting a war over weapons of mass destruction that didn't actually exist. That's a different blog, though.)
There's an entertaining blog out there, David Lereah Watch, that's been hammering at Lereah for some time. Lereah has recently been named by Time Magazine as one of the top 25 people responsible for the financial crisis, so that blog isn't alone in slamming the economist. But Lereah Watch has done a great job in exposing what a hypocrite Lereah is.
For instance, Lereah has admitted that he did spin the news a bit in arguing against the possibility of a housing bubble. Lereah, though, says he did this at the request of the Realtors Association. I don't doubt that. But Lereah could have had some guts. He could have refused. Heck, he could have resigned. Don't tell me that Lereah would have had a hard time finding another job.
(I've used the same argument about Colin Powell, by the way. Remember, he was against the Iraq war. Something he's mentioned ever since leaving his post in the former Bush administration. My question is, why didn't he show a backbone and say something while he was Secretary of State? You know, when he might have been able to do something about the mess Bush got us into. But, again, that's another blog.)
The lesson here is this: Don't ever trust any information that comes from the National Association of Realtors. And don't trust the media to dig deeply enough to discover for themselves that the association is lying.