Lereah "Housing Market Has Now Hit Bottom"

Responding to the August Existing Home Sales Number, David 'soft landing' Lereah, stated that "We've been anticipating a price correction and now it's here. The price drop has stopped the bleeding for housing sales. We think the housing market has now hit bottom.''

Think Again!

David Lereah Spoof

Genius. Thanks to Housing Panic.

David Lereah Watch Mentioned In Salon

David Lereah Watch was mentioned in Andrew Leonard's How the World Works column in Salon Magazine. :-)

Chicken Little's revenge

The August new-housing-start numbers are out, and they're not good, dropping by more than analysts expected.

But the heck with the numbers. According to David Lereah, chief economist at the National Association of Realtors, this was all to be expected. "The housing boom ended more than a year ago, but sellers are having a tough time accepting that fact," said Lereah. "The result has been tumbling sales as buyers stay on the sidelines.”

The busy beavers commenting at the Housing Bubble blog, who have been grinding their teeth over Lereah's self-serving interpretations of real estate data for years, were quick to dig up a quote from exactly "a year ago."

"With a general background of growing population and favorable affordability conditions, home sales are staying at very healthy levels," said Lereah. "As a result, we'll continue to see above-normal home price appreciation for the foreseeable future."

Lereah is quoted in nearly every article that reports new-housing data, as if he were some kind of impartial source, instead of a spokesman for the real estate industry and the author of a book whose 2005 title was "Are You Missing the Real Estate Boom?: Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade -- and How to Profit From Them." But personally, I didn't think the above quote was all that damning. So I went looking for more and found the latest proof that on the Internet, there really is a blog devoted to everything an info junkie could possibly need. I give you David Lereah Watch.

There, we can find a picture of a Power Point slide from October 2005, in which Lereah called two of the biggest predictors of a housing bust, Yale's Robert "Irrational Exuberance" Schiller and Dean "Beat the Press" Baker, "Chicken Littles." We also learn that in February, the title of his book was changed to "Why the Real Estate Boom Will Not Bust -- and How You Can Profit From It."

We're looking forward to the 2007 title: "Busted! Why You Should Have Listened to Chicken Little, Instead of Me."

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What a great article! Thanks!

David Lereah: The Boom Ended A Year Ago

“The housing boom ended more than a year ago, but sellers are having a tough time accepting that fact, says David Lereah, chief economist at the National Association of Realtors. The result has been tumbling sales as buyers stay on the sidelines.”
“The expansion that began in November 1991, when mortgage rates fell into single digits, became a boom following the 9/11 terrorist attacks, when trillions of dollars left the stock market looking for a safe haven in real estate, Lereah said.”

“This correction is different from any others because it wasn’t triggered by a recession, high financing costs or job losses. With unemployment below 5 percent, mortgage rates still below 7 percent and a growing economy, ‘all you need is a price correction, a price adjustment, to bring the market back,’ Lereah told the crowd.”

“The transition to lower prices is already under way nationwide, Lereah said, and will result in a more balanced market than the one that has been dominated by sellers. He said the Capital Region experienced ‘a moderate boom’ without the extreme price run-ups or overbuilding seen in parts of California and Florida. As a result, ‘you don’t need as much of a price correction,’ he said.”

“Lereah predicted prices will drop nationally over the next six months, and that each percentage point drop ‘will bring thousands and thousands of buyers back into the marketplace.’” (Times Union)

David Lereah @ Peak Bubble

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years," said David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?" "It's as if you had 500,000 dollar bills stuffed in your mattress."

He called it "very unsophisticated." (Los Angeles Times Aug 28th, 2005)

David Lereah Watch Makes Chicago Tribune Article

The David Lereah Watch Blog made it into the mainstream media. Here is an excerpt from a Chicago Tribune Article:

Lereah and his fellow housing industry economists don't come out unscathed. Critics say they generated unfounded optimism that the housing market would soar perpetually.

"In October 2005 Lereah was busy calling the bubble believers `Chicken Littles,'" goes one post in a blog dedicated to criticizing the economist, davidlereahwatch.blogspot.com. "Many of the predictions espoused by the `Chicken Littles' are fast becoming closer to reality. ... David Lereah has lost credibility because of his irresponsible cheerleading."

I am glad that I have been challenging the housing industrial complex. David Lereah and the National Association of Realtors have been engaging in digraceful behaviour.

Lereah: "Home prices should return to positive territory within a few months"

Home sales during the rest of the year will be lower than earlier projections as the market works its way through an inventory and price imbalance, according to the National Association of Realtors^®.

David Lereah, NAR’s chief economist, said the most obvious effect in the near term will be with home prices. “A year ago we had record home sales and tight supply with buyers bidding over the asking price,” he said. “This year sales are slowing, homes are plentiful and sellers are negotiating. Under these conditions, we’ll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory.”

“This is a normal pattern during a market correction, but home prices should return to positive territory within a few months and annual appreciation will be slower than historic norms,” Lereah said. “Keep in mind that over time, home prices rise at the rate of inflation plus one-to-two percentage points – buyers in most of the country who plan to stay in their home for a normal period of homeownership can pretty well bank on those historic averages, but people who purchased last year with the intent of flipping are likely to get burned.”

NAR Septmeber 2005 Forecast

Lereah's Most Recent Deception

Recently, Florida Paradise Lost reported how the National Association Realtors, kept on revising their forecasts for 2006 existing home sales. However, the NYTimes quoted David Lereah who is the chief economist for the National Association of Realtors as saying:

“The boom is cooling now,” said David Lereah, the chief economist for the association, who added that falling home sales have been “a bit worse than we had anticipated.”

The group said that it now expected sales to fall further than it has said in the past — about 7.5 percent this year compared with an earlier projection of a 5 percent decline.

As chief economist of the National Association of Realtors (NAR), David Lereah, is responsible for the economic forecasts. Back on October 28th, 2005 the NAR forecasted that:

Existing-home sales are projected to decline 3.5 percent in 2006 to 6.86 million. New-home sales, seen to grow by 8.0 percent to 1.30 million in 2005, are expected to fall 4.5 percent to 1.24 million next year. The figures for 2006 would be the second highest year for each sector.

So on October 28th, 2005 the David Lereah and the NAR forecasted that there would be a decline of 3.5% in existing home sales for 2006 compared to 2005. Now, Mr. Lereah is forecasting a decline of 7.5% for 2006.

The September 2006 forecast is more then double the decline of the October 2005 forecast. Despite the large adjustment from his October 2005 forecast, David Lereah says that the decline is "a bit worse than we had anticipated." This is deceptive. Due to his cheerleading and continuing deceptions Mr. Lereah cannot be trusted.

David Lereah: Small Temporarily Blip in Prices

Prices should bounce higher in a few months, said David Lereah, chief economist for the real estate group "as the market works through a build in housing inventory."

"This year sales are slowing, homes are plentiful and sellers are negotiating," Lereah said. "Under these conditions, we'll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory."

Lereah said home prices typically appreciate at the rate of inflation, plus one or two percentage points. Buyers who plan to stay in their homes should see those gains, but "people who purchased last year with the intent of flipping are likely to get burned," he said.

(MarketWatch)