David Lereah Watch Mentioned in The Wall Street Journal
In today's Wall Street Journal in an article titled 'Renters Gloat Over Housing Slump,' the David Lereah Watch Blog was mentioned and I was interviewed.
Mr. Lereah resorts to putting words in my mouth when he says, in reference to my blog, that "There are people who believe it's the end of the world" for housing. I have never claimed it is the end of the world for housing. I claimed that from peak the "Prices declines in the bubble markets are very likely to vary between 20% - 65 in real dollars."David Jackson, a 26-year-old information-technology specialist, has been railing against the housing industry for two years -- ever since he made a vain attempt to find an affordable town house or condo in Silver Spring, Md. Unable to understand why prices were so high, he began researching the real-estate market and, he says, "came to the conclusion that there was a massive housing bubble." So Mr. Jackson decided to remain a renter. He pays $645 a month for part of a townhouse.
Now that the housing market is slumping, "I feel vindicated," Mr. Jackson says. "But I'm not looking forward to the coming recession." He believes that the housing slowdown and the effects of "a mountain of debt" on consumers will pull the entire economy into a slump.
Mr. Jackson blames what he calls "the housing industrial complex" in general and Mr. Lereah, the Realtors' economist, in particular. Since last year, Mr. Jackson has maintained a blog (davidlereahwatch.blogspot.com) devoted entirely to vilifying Mr. Lereah.
The blog recently offered a $75 cash prize for an essay containing "the most scathing criticism" of Mr. Lereah. Sample submission: "Dr. Lereah is a lying snake with the ethics of a dope-dealing pimp."
Mr. Lereah says he doesn't object to the blog. "There are people who believe it's the end of the world" for housing, he says. "They blame me for being positive."
By putting words in my mouth, Mr. Lereah, attempts to make me out as a housing extremist. He uses a straw man (Fallacy Of Extension) argument. Mr. Lereah cannot be trusted because of his history of deception and wrong predictions.
posted by David @ 10:58 AM
17 comments
17 Comments:
Why can`t the FBI, the Attorney General or the SEC investigate this man if he was really lying and corrupting the Real estate indusry?
What will happen to those who bought houses following his advise and predictions and now losing their asset values, just like believing the STOCK ANALYSTS of the 2000 Tech Stock bubble?
David,
Keep blogging and take comfort in the fact that you will get the last laugh.
Thanks for your support!
Lereah has said the he owns condos in a undisclosed Florida location!
Earlier, sombody wrote:
"The National Ass. of Realtors has launched a $40 million ad campaign with the slogan "It's A Great Time To Buy Or Sell A Home." There is a real paradox at work here, because there are great times to buy and there are great times to sell, but there is never a great time to do both simultaneously."
Actually this is not true. If the commissions go down a lot from their regulated collusion levels, then it will be a good time to both buy and sell! I am looking forward to the time when that high-school graduate with a cell-phone and SUV will get paid 6 basis points instead of 6 percent.
David Lereah sounds like a con man.
Congrats on the article! I'm a real estate appraiser with 21 years experience. I'm witnessing the decline firsthand (again). I don't blame realtors or their spokesmen. I blame the American consumer who is a moron when it comes to markets, interest rates and mortgage products. The assumption that real estate goes nowhere but up is mind boggling. After 5+ years of using their homes as an ATM machine the bill is now coming due. Unfortunately there is no equity left to make that adjustable loan into a fixed. Foreclosures will soon begin to skyrocket and the lending industry will be blamed (again). This is what happens when people view housing as a commodity and not as a place to live. Oh well, I guess there will be a ton of great deals for us!
julius,
Look at my other site:
Bubble Meter Blog
"Real dollar prices declines in the bubble markets are very likely to vary between 20% - 65 in real dollars (inflation adjusted) from peak to bottom (it may take up to 8 years)."
Bubble Market Conditions
"Why can`t the FBI, the Attorney General or the SEC investigate this man if he was really lying and corrupting the Real estate indusry?"
Ummm because they're in on it (duh) (you're talking about an attorney general whose parents are illegal aleins, an AG who prosecuted border patrol agents for shooting at a drug smuggler).
The whole real estate bubble is profligated to fund & promote illegal immigrantion and pump money into our failing economy. (why do I say the economy is failing? look at our debt)
"Able Danger" was terminated not because it "invaded our privacy", the government has no problem whatsover giving American citizens rectal exams whenever it suits them.
Able Danger was terminated because it revealed massive loan fraud & millions of illegal aliens.
Why did "they" want to cover up massive loan fraud & illegal immigration?
For money silly, GREED.
Why do the Chinese buy our massive loan debt? It's cheaper than warfare, they're literally paying us to commit economic & cultural suicide.
A bankrupt America is easier to loot, merge or split than a solvent one, look what happended to the Soviet Union, imagine if the same state looting occurred here with out "rule of law".
Americans could literally be evicted from their own country by foreign landlords.
>You've left yourself a lot of >leeway and frankly I could use a >dart board for that kind of >accuracy.
How is that giving yourself a lot of leeway? Consider all the alternatives - Prices stay flat, inflation adjusted. Prices climb at modest rate of 2%. Prices continue climbing at todays rates (100% in some areas). Any of these scenarios could convince me to jump into the market today.
>But you still don't say what they >will decline from.
I think he said the peak. It is pretty clear that prices have peaked in many areas and are already declining. And this is with current low interest rates.
>If prices ran up 200%, say to >$300,000 from $100,000, which has >happened in many markets in D.C., >are you saying that houses that >are $300,000 now in Washington, >D.C. are headed to $240,000 over >the next eight years? Is that your >exact prediction?
Nobody can predict with that kind of accuracy, and so it is foolish to even ask the question.
>By the way that real dollar >prediction is meaningless.
What does that mean? Why is it meaningless? What is more meaningful?
>It's always in dollars. What they >could, should or might be worth is >may or may not transpire.
Huh?
/V
That is from the peak price. The reason it is such a wide range is because it refers to a collection of bubble markets (Phili, NYC, DC, Bakersfield, Miami etc) and a range of housing types.
If you want predictions about specifics please post!
Julius,
He is free to make predictions. In general I agree with his line of thinking that prices will drop. However I am always skeptical about any predictions, from anybody. I watch people on CNBC everyday make all kinds of predictions. They cannot all be right. David may be exceptional at this. I don't know.
But anyway while we are on the topic, David can you predict Irvine/OC area market over the next 5 years? :)
/V
What do you call specifics? This is what you asked:
"If prices ran up 200%, say to $300,000 from $100,000, which has happened in many markets in D.C., are you saying that houses that are $300,000 now in Washington, D.C. are headed to $240,000 over the next eight years?"
If prices turned out to be 241,000 after 7 years would you consider this an accurate prediction. What if it hit 200,000 in 6 years but recovered to 300,000 after 8. I repeat, nobody can be exact! Your original post about being specific is just nitpicking.
I asked about OC prices, because I listen to what everybody has to say and then I form my own opinion. I understand that a lot of people will have differing opinions on how markets will fare, and *no one* will be 100% accurate.
/V
JuliusCleaver,
I expect real dollar prices in the DC area to fall between 20% - 35% from peak price (which was genereally 3Q 2005). This will depend on the neighborhood, the housing type etc.
[In my neighborhood condo prices are already down about 15% in real dollars from peak.]
David
"It's a foolish comparison because the purchasing power of the dollar has actually increased in many areas"
Julius, please don't show your ignorance of basic economics like that. Inflation is a very real concept measured carefully by the Federal Reserve and very important interest rate decisions are made based on inflation.
I know you are going to come up with some lame rebuttal that a flat screen TV costs less today than a year ago. That is because of productivity improvements. This is not what inflation is. Inflation measures cost of living (although means of measuring it may not be perfect), but that is for the fed to decide.
The opposite of inflation is deflation. This means that people will hold on to the dollar because the cost of buying tomorrow is cheaper than it is to buy today. Deflation is very bad for the economy and puts it in an endless recession. It is very hard to get out of deflation. Japan went through this in the 90s where the Central Bank maintained interest rates of 0%, for a long long time.
Inflation is real and absolutely has to be taken into account before investing in anything, housing included.
"Also, tell us what you mean by real dollars."
Inflation adjusted. Using the CPI.
I don't know anybody here, and I'm certainly nobody's friend here. The only troll appears to be JuliusCleaver. Stop feeding the troll.
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