NAR Economist Lawrence Yun Doesn’t See a Housing Bubble

We read with interest a recent Q&A with Lawrence Yun, the chief economist for the National Association of Realtors (NAR), that ran in the San Jose Mercury News. Yun is a man who, when he speaks, everyone interested in real estate listens. His predictions and observations is closely analyzed across the country and in the halls of congress. As a builder of new homes for sale in the bay area, we were especially interested in his thoughts on how creating more housing can ease the pain of high home prices, and on whether or not we’re seeing a bubble in bay area residential real estate (Yun says there is no bubble). Some highlights:

Yun is asked whether he saw a bubble before the 2008 crash. His response:

Lending was opening up to a point at which there were no underwriting standards. It clearly was abnormal. It was … a misalignment of all the fundamentals.

Yun looks at bay area real estate prices and contrasts now to 2008:

Underwriting standards are much tighter. People who get mortgages are meeting very strict standards. Second, there are large cash transactions. People are cashing in stock options and Asian buyers are coming in with all cash. Any time there are cash transactions and higher down payments, the risk of potential decline is reduced.


The market is still in recovery mode. Together with tighter lending standards and crash transactions… there’s less risk.

We think the article is worth reading in full here