In the face of overwhelming evidence of a housing market meltdown, the NAR is slowly recognising the extent of the disaster. Today, it published their latest market assessment, and further reduced their 2007 housing price forecast. The group now believe that house prices will fall by about 1.4 percent this year.

The NAR also reduced their sales forecast, suggesting that existing home sales will reach just 6.11 million this year. That is a lot of lost 6 percent commissions. Furthermore, the group now believes that housing starts in 2008 will fall to their lowest level since 1998.

Although the NAR have woken up to the the fact that 2007 will be a bleak year for realtors, denial again sets in when it considers 2008. The group believe that existing home sales will increase, and prices will recover slightly. Yeah right, 2008 will be prime time for ARM resets. The year will be marked by an avalanche of defaults and foreclosures, which will provide the ideal background for an market recovery.

A pattern is now emerging. From here on out, the NAR will produce their monthly forecast, with each press release more pessimistic than the one issued before. It will be a case of hope fighting it out with reality. Of course, reality always wins.