Thursday, October 05, 2006

David Lereah Respond's To Moody's Housing at Tipping Point

David Lereah responded to Moody's negative report on Housing at Tipping Point:
David Lereah, chief economist for the National Association of Realtors, disagrees with the severity of the price downturn in the report.

"It's possible we could go under zero, if you include prices of new homes" along with sales data for existing homes, he said. "For existing homes, I'm still predicting that prices will be above [last year] by 2 percent."

Nonetheless, Lereah agreed that broad price declines in some regions are unavoidable.

"I don't think I would use the word `crash,'" he said. "When you use a word like that, it's almost a self-fulfilling prophecy in the housing market. These are people's homes. Their retirement is depending on it."
Is Mr. Lereah saying that if people's retirement did not depend on the housing market then he would use the term 'crash' like Moody's did? If the housing market was indeed based on fundamentals, in the bubble markets using the term 'crash' would not become a 'self-fulfilling prophecy.'

Mr. Lereah, you were one of the housing cheerleaders who encouraged people down this dangerous path. You even wrote two books promoting the housing boom. As Ben Jones wrote "Maybe the NAR should have been urging caution the past few years instead of cheering prices higher."

4 Comments:

At 11:28 PM, Blogger wizardofozziejurock said...

The unbelievable and unmitigated nerve of Lereah! Now he's trying to protect those poor homeowners who have been relying on their home equity for retirement.

Where was his sympathy for all those who were priced out of home ownership due to the housing bubble he and others championed?

Where was his sympathy for families who went into debt over their heads...encouraged by the likes of Lereah and his NAR colleagues.

I'm not worried about those planning for retirement unless they were foolish enough to borrow against the equity in their home. The gains in housing were always paper gains, as much as Lereah and others tried to claim otherwise.

Boom/bust economics is a destructive force -- it destroys the long-term stability of communities and entire nations. The psychological effects of a whole nation of people realizing they've been conned will have far-reaching implications.

For people like David Lereah and his army of glad-handing realtors, the housing bubble was a convenient opportunity to push record numbers of buyers into homes they couldn't afford they couldn't afford.

The media would be doing the public a great service by exposing not only the truth about the housing bubble, but about the instrumental role that Lereah and the NAR played in support of it for their own gain.

 
At 10:51 AM, Blogger lindsey said...

I don't run a blog on it, but I do conduct my own sort of Lereah watch.

On Wednesday he released the latest update on his "prediction" for 2006. Not surprisingly, we aren't doing as well as he expected in September, let along back in January.

Here's the rundown:

October 11
Home Prices Correcting, Buyers Returning to the Market

Home sales appear to be bottoming out with lower home prices attracting buyers in many areas of the country, according to the National Association of Realtors.
Existing-home sales are forecast to be fairly stable in the fourth quarter and sales for all of 2006 are expected to drop 8.9 percent to 6.45 million – still the third strongest year after consecutive records in 2004 and 2005. New-home sales are forecast to fall 17.3 percent this year to 1.06 million, the fourth highest year on record. Housing starts should be down 10.9 percent to 1.84 million in 2006.
With a recent correction in the market, the national median existing-home price is likely to rise 1.6 percent to $223,000 for all of 2006; it’s anticipated prices will remain slightly below year-ago levels before gaining positive traction in the first quarter of 2007. The median new-home price is projected to decline 0.2 percent to $240,500 – largely the result of builder price cuts to move unsold inventory.


Sept. 7

WASHINGTON (September 7, 2006) – 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®.
The national median existing-home price for all housing types is expected to grow 2.8 percent this year to $225,900, with the median new-home price rising only 0.2 percent to $241,400. New-home appreciation is dampened by builders offering incentives to reduce inventory.

Existing-home sales are forecast to fall 7.6 percent to 6.54 million in 2006, the third best year after consecutive records in 2004 and 2005. New-home sales should to drop 16.1 percent this year to 1.08 million, the fourth highest on record. Housing starts are projected to decline 9.6 percent to 1.87 million in 2006.


Aug. 8

WASHINGTON (August 8, 2006) – The housing market is in a process of stabilizing with little change in overall sales volume expected over the balance of the year, according to the National Association of Realtors®.

Although sales will be fairly steady over the balance of the year, declines since last fall mean annual totals will be lower. Existing-home sales are forecast to fall 6.5 percent to 6.61 million this year, the third highest on record after 2005 and 2004. New-home sales are projected to drop 12.8 percent in 2006 to 1.12 million, also the third best on record. Housing starts should be down 9.1 percent to 1.88 million this year.


July 11
Existing-home sales are expected to decline 6.7 percent to 6.60 million in 2006 from 7.08 million last year. That would still be the third highest level on record. New-home sales should fall 12.8 percent this year to 1.12 million from 1.28 million in 2005. Housing starts are forecast to decline 6.8 percent to 1.93 million this year from 2.07 million in 2005.


June 6
Existing-home sales are projected to drop 6.8 percent to 6.60 million this year from the record 7.08 million in 2005. New-home sales are forecast to fall 13.4 percent to 1.11 million from a record 1.28 million in 2005. Housing starts are likely to decline 6.2 percent to 1.94 million in 2006 compared with 2.07 million last year..


May 9
Existing-home sales are likely to fall 6.4 percent to 6.62 million in 2006 from a record 7.08 million last year. New-home sales are projected to drop 11.6 percent to 1.13 million from last year’s record of 1.28 million. Housing starts should decline 3.7 percent to 1.99 million this year compared with 2.07 million in 2005.


April 11
Existing-home sales are projected to drop 6.0 percent to 6.65 million this year from a record 7.08 million in 2005. New-home sales are likely fall 10.9 percent to 1.14 million from the record 1.28 million last year – both sectors would see the third best year following 2005 and 2004. Housing starts are forecast at 2.00 million in 2006, which is 3.2 percent below the 2.07 million in total starts last year.


March 13
Existing-home sales are expected to fall 5.7 percent to 6.67 million in 2006 from the record 7.08 million last year. At the same time, new-home sales are forecast to decline 7.7 percent to 1.18 million from a record 1.28 million in 2005 – each sector would be at the third highest year following the tallies for 2005 and 2004. Housing starts are likely to total 1.98 million this year, down 4.3 percent from 2.06 million in 2005.


Feb.7
Existing-home sales are likely to decline 4.7 percent to 6.74 million this year, down from a record 7.07 million units in 2005, while new-home sales are expected to fall 8.5 percent to 1.17 million from a record 1.28 million in 2005; both sectors would see their third best year after the totals for 2005 and 2004. Housing starts are seen at 1.87 million units in 2006, down 9.3 percent from 2.06 million last year.


Jan. 10
After setting a fifth consecutive annual record, projected to 7.10 million units for 2005, * existing-home sales are forecast to ease by 4.4 percent to 6.79 million this year, which would be the second highest on record. New-home sales, which should be a record 1.29 million for 2005, are expected to decline 6.0 percent to 1.21 million in 2006 – that also would be the second best year in history. Total housing starts for 2005 are seen at 2.07 million units – the highest since setting a record 1972 – with a 6.6 percent slowing to 1.94 million this year.


Do with it what you will.

 
At 10:54 AM, Blogger lindsey said...

FTR, the asterisk in January is because his calculations were based on the estimates of 05 sales. You can see existing sales are off by twice as much as his original estimate and new sales are approaching a decline of three times more than he predicted.

 
At 12:53 PM, Blogger first_time_buyer said...

I want to examine his back if he has a backbone. The guy is pretty flexible to carry one. LOL

 

Post a Comment

<< Home