The National Association of Realtors issued a brief statement Monday announcing that outspoken chief economist Dr. James F. Smith had resigned and that a new chief economist was being sought.

The one-paragraph announcement said simply: "James F. Smith resigned as chief economist for the National Association of Realtors after one year in that post to pursue other opportunities. The search for a new chief economist is underway, say NAR officials."

Attempts to reach Smith were unsuccessful. Workers in the economics department at the NAR's Washington headquarters said only that Smith had resigned last week and left immediately.

Smith was hired as the association's chief economist and business climate forecaster in February 1999. He replaced popular economist Dr. John Tuccillo, who is now an industry consultant.

Smith came to the NAR from the University of North Carolina at Chapel Hill where he was widely acknowledged as one of the nation's leading economic forecasters.

Smith had twice been recognized by The Wall Street Journal as the nation's top economic forecaster in its semiannual survey of economists and had previously been named by the Forecasters Club of New York for having the most accurate economic forecast of any club member. Also, Smith is a past president of the National Association for Business Economics.

Outspoken and controversial, last July Smith predicted the next recession would start a little more than a year after George W. Bush is elected president this November. He predicted Bush would raise taxes early in his term and the impact would begin being felt in early 2002.

He said the stock market would collapse on May 16, 2002, trigging a brief recession.

"That's when the Board of Governors of the Federal Reserve System will release 'industrial production' data for April. The good news is that interest rates on 30-year fixed-rate mortgages are forecast to fall to 5 percent by December 2002, igniting a boom in refinancing and spur a renewed activity in home sales."

Although popular with rank and file Realtors, his interest rate forecasts have been off the mark.

As late as last June, when interest rates were beginning to climb, Smith said the increase would be short lived.

"Real interest rates remain high when compared with inflation, and much of the recent interest-rate increase may be attributable to psychological factors," he said in last June. "We expect 30-year fixed mortgage interest rates to trend downward downward to the range of 6.0 to 6.5 percent by the end of (1999)," Smith said.

Year-end interest rates actually were about a full percentage point higher by end of the year and currently hover around 8 percent.

On March 13, writing in Real Estate Outlook, Smith conceded 30-year fixed-rate mortgage rates would likely "rise slowly during 2000, averaging 8.5 percent over the year."

Published: March 21, 2000

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