Article that Mentions Mr. Lereah

Peak House (HoweStreet.com)

Time Magazine Names Lereah as Part of '25 People to Blame for the Financial Crisis'

Time Magazine Names David Lereah as Part of '25 People to Blame for the Financial Crisis.' The page on Lereah is here.

When the chief economist at the National Association of Realtors, an industry trade group, tells you the housing market is going to keep on chugging forever, you listen with a grain of salt. But Lereah, who held the position through early 2007, did more than issue rosy forecasts. He regularly trumpeted the infallibility of housing as an investment in interviews, on TV and in his 2005 book, Are You Missing the Real Estate Boom?. Lereah says he grew concerned about the direction of the market in 2006, but consider his January 2007 statement: "It appears we have established a bottom."

Nice. Well put. He definitely deserves blame for the current financial crisis. It would have been much better if the mainstream media had shined the light of scrutiny on David Lereah back during the height of the bubble when he was cheer leading the bubble and then later denying the bust.

WSJ Digs Deeper into Lereah's Past

Ina recent article the Wall Street Journal (WSJ) builds upon a recent short interview with Money Magzine in which Lereah admits that 'I spun.' The WSJ article is titled Realtors' Former Top Economist Says Don't Blame the Messenger. Here are some juicy excerpts:

Once one of the world's most-visible housing experts, Mr. Lereah is disconnected from his old life. The former chief economist for the National Association of Realtors says the group's top executives won't return his phone calls. He says he wasn't invited to the association's 100th birthday bash last May

One of my theories is that Lereah was forced to resign from the Realtors' group back in 2007 as he had become fully discredited by that point. [ Mr. Lereah denies this. ]

Mr. Lereah, 55 years old, is one of many prognosticators who won professional accolades during the housing boom, only to see their reputations wither in the bust. Throughout 2005, when home prices in the U.S. hit their fifth consecutive annual record, Mr. Lereah was on television so often his wife, Wendy, would catch him by accident. He flew first-class to meetings and speeches in places like Hawaii and Aspen, Colo., staying in suites at expensive resorts. His bosses awarded him more responsibility. That year, he published his second book, "Are You Missing the Real Estate Boom?"

Mr. Lereah continued to make rosy statements amid growing signs of a housing downturn -- like this declaration in January 2007: "It appears we have established a bottom." A few months later, NAR announced that existing-home sales fell 2.6% in April from a month earlier and 10.7% from a year earlier.

It gets juicier.

Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts -- then was left to shoulder the blame when things went sour. "I was there for seven years doing everything they wanted me to," he said, looking out his window to his tree-filled yard in this Washington suburb.

He was the paid shill of the National Association Realtors. The truth comes out.

Mr. Lereah admits to one mistake: believing there would be no national housing crash. "I have to take the blame for that," he says. "I never thought it would be as bad as this."

Bloggers Reacts to Lereah's Admission

Former NAR Economist David Lereah is a Jackass (Big Picture): "Of all the various parties who contributed to the boom and bust in housing and credit, none have escaped more unscathed than the National Association of Realtors, and their former Baghdad-Bob-in-Chief, David Lerea

The NAR turned a blind eye to fraud amongst realtors in terms of referrals to corrupt appraisers and mortgage brokers. They constantly cheerleaded prices, despite evidence to the contrary. For 3 years, they have been forecasting 2nd half price recoveries, dissuading realism amongst home sellers. They continually spun data, presented misleading commentary, and otherwise engaged in behavior that could only be characterized as sleazy."


David Lereah does a pathetic one-eighty (The Mess That Greenspan Made): "Pathetic, just pathetic...

Leaning against his granite countertops when hundreds of thousands of former homeowners who thought he was telling the truth back in 2005 had to turn their granite countertops over to the bank, the little smirk, the casual tone, the change in outlook, the ham-handed acknowledgment that he was wrong but that he was just doing his job, so, it was understandable that he might be wrong and him taking responsibility for being wrong now is quite a noble thing to do. Pathetic... "


David Lereah finally admits that he was a paid liar, sent out by the evil National Association of realtors to deceive and ruin lives (Soots and Ashes): "The NAR should be banned, broken up under RICO and Robinson-Patman. They are evil, they are directly responsible for the ongoing worldwide financial collapse, they have been exposed, and they should be destroyed."

David Lereah Admits He 'Spun' For the Realtors. Takes Responsibility

David Lereah, currently working for Reecon Advisors Inc, now admits he "put a positive spin" on the housing market during the boom and bust times. Mr. Lereah goes on to take responsibility for his predictions while he was at the National Association of Realtors. This comes from a recent interview with Money Magazine article titled 'Former real estate bull admits, "I spun"'.

Q: Were you wrong to be so bullish?

A: I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.

Q: Any regrets?

A: I would not have done anything different. But I was a public spokesman writing about housing having a good future. I was wrong. I have to take responsibility for that.

It is a positive that Mr. Lereah is taking partial responsibility for his actions while he was working at the NAR. It all begs the question is Lawrence Yun also engaging in 'positive spin?'

Additional Links:

Realtor Chief Economist: “I spun” (NJ Real Estate Report)

Another Reason Not to Trust So-Called Economic Experts (Seeking Alpha)

Lereah & Others Missing The Housing Bubble

From a blog at The Atlantic:

Unless I were allowed to rely exclusively on David Lereah (until recently the permabullish economist for the National Association of Realtors) I would be hard put to find one economic expert who had completely missed the housing bubble, much less write an entire article consulting no one else.

David Lereah definitely missed and dismissed the housing bubble. If one goes back to 2004, 2005 or even 2006 there were plenty of economic experts who had completely missed the housing bubble including economists at Harvard the Federal Reserve and at other prominent institutions.

Dean Baker Criticizes Washington Post for Quoting Lereah So Often

Dean Bake Criticizes Washington Post for Quoting Lereah So Often as an 'Expert' on the housing market.

First, reporters should recognize that people employed by an industry lobby have an ax to grind. They are not neutral observers. This means that it was incredibly irresponsible to have David Lereah, the chief economist for the National Association of Realtors, as the Post's most widely cited expert on the housing market. Lereah was in the business of selling homes, not helping Post readers understand the economics of housing. The paper's reporters and editors should have known this.

I agree entirely with Dean Baker's criticism of the Washington Post. It should be noted that it was not just the Washington Post, but many others in the media also relied primarily on 'expertise' from paid shills working for the real estate industry's various trade group. These paid shills actively promoted the interests of their employers even when the facts flew in their face.