I can't help but compare the current real estate depression and NAR's misguided efforts to stimulate the market to the infamous words of former Boston Celtics coach, Rick Pitino when he said, "Larry Bird is not walking through that door" after another loss for the former storied basketball franchise.

For those of you who don't know, Larry Bird, Larry "Legend", as many in New England used to refer to him, was responsible for leading the Celtics to three NBA championships within a six year span.  He is and will always be an icon in Boston sports.  And so in 2000, after yet another loss, and another losing season was well under way, Rick Pitino said what a lot of fans needed but didn't want to hear, "Larry Bird is not walking through that door."  In other words, what worked before in the past is not what is going to help us now.

As NAR and our new NAR President, Charles McMillan, continue to search for solutions, I would like to remind them that what worked in the past, lower mortgage rates, is not likely to work in the future, "Larry Bird is not walking through that door." 

What the NAR, and apparently the Fed and Treasury, have overlooked, is that there simply are not the millions of qualified primary residence home buyers, with capital in their hands, sitting on the sidelines today that they think that there are.  Homeownership rates are still hovering near 68% according to the Census Bureau, this is well above the historic norms of approximately 64%.

What we are seeing today is that despite lower mortgage rates, fewer sales are taking place.  What this means is that the surge of home sales we saw through 2003-2006 was not rate driven but credit driven.  In other words, it's not the mortgage rate, it's the access to credit. 

So no, Larry Bird and millions of primary residence home buyers are not walking through that door just because mortgage rates are at 50 year lows.  While it may be politically incorrect to say, which would explain why nobody is saying it, the recovery of the housing market and broader economy is contingent upon the tax incentives that the government will provide to Americans who have the credit and capital, to invest in real estate and absorb the excess supply of nearly two million homes that are sitting on the market.