The National Association of Realtors isn't the only real estate trade group to blame the national press for slowing housing sales. The National Association of Home Builders is joining the pity party with the lowest two-month reading of its sentiment index since January 1985. Any reading above 50 is considered optimistic. Right now, builders are at a pessimistic 19.

Current president Brian Catalde, a builder from El Segundo, believes that the media is fueling unrealistic expectations about how far prices will truly fall. The press routinely quotes economists who say that housing has anywhere from 10 to 25 percent more to drop before the correction stage is over.

Well, it's obvious buyers want to be correct - not wrong, so it's no wonder they're sitting on the sidelines. Even with a generous supply of incentives, home buyers aren't stupid. They don't want to see their homes lose value, and they don't have confidence that builders won't continue to knock down prices. Why buy now when your home could be worth less in three months?

New home sales nationwide are down about 23 percent from last year, and that's cause for real concern because buyers aren't flocking to the negotiating table. They're too scared.

Back in March, DR Horton CEO Don Tomnitz made a startling forecast. He said builders' pricing power wasn't going to return until 2008. Meanwhile, he said, "'07 is going to suck."

He was right, but nobody could have predicted how bad things would get. This month, Robert Toll, chairman of Toll Brothers, said somewhat more elequently that markets around the country range from "miserable to outright purgatory."

But there is some good news out there for buyers. Healthy markets are being impacted by all the negative press, which could translate into some real bargains. Also, new home inventories are historically large. With nearly record low interest rates, the house party could get started again.

One thing that would help is for builders to be a little more careful about what they say to the press. Consumers don't realize that when a builder says business is bad, it's bad for builders, not customers. That's the time for buyers to turn up the heat and ask for upgrades and other incentives.

What should you do? See what Market Conditions are like in your area. Click on Realty Times, then View Market Conditions.

Published: November 21, 2007

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.