Friday, December 29, 2006

Lereah 'It appears we've hit bottom' Again!

The NAR's November existing homes sales were released on December 28, 2006. One day later Mr. Lereah declares:


"It appears we've hit bottom, the price drops are necessary to stir sales. It is working." (Globe and Mail Dec 29th 06)


This is not the first time Mr. Lereah has thought that now is the bottom. On September 25th, 2006 Mr. Lereah said this:
"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."

But wait it gets much better. On May 25, 2006 Mr. Lereah uttered:
"This may be the bottom. It appears May is a little better."

When did we hit bottom? According to Lereah it keeps on moving. Mr. Lereah cannot be trusted. He just spews words to the public through the mainstream media. He is a paid shill. Don't trust him. Don't listen to him. This guy should be fully discredited by now.

27 Comments:

At 10:34 AM, Blogger fashionista said...

Whoa, in the Wall Street Journal!

 
At 10:44 AM, Blogger Smitty said...

We will have hit bottom when builders cannot build for less than the cost of existing housing stock, I'd say builders can build for less than $100/sq foot, we're a long way from the bottom.

 
At 11:05 AM, Blogger biggiepaws said...

I'm in ft. lauderdale/miami, and the bubble isn't over here yet...Just ride your bike in the neighborhood and on every block you see 3-6 for sale signs, and the desperate ones with both for sale and for rent signs up!! I started keeping an eye on this a couple of years ago when I read a study by the national city bank economist (it's a little dry, but good data and the website has improved over the intitial spreadsheet and report)

http://www.nationalcity.com/corporate/EconomicInsight/HousingValuation/default.asp

 
At 3:05 PM, Blogger Chris Evers said...

Lereah is a joke. I find it especially laughable that he calls himself an "economist"....as if he really conducts rigourous and objective research and presents his own unvarnished conclusions. Calling Lereah an economist is an insult to all economists.

Come on NAR, give up the freaking charade and call a spade a spade, the guy is a freaking spokesman...

 
At 7:51 PM, Blogger T.C. said...

U.S. mortgage applications decrease last week-MBA

NEW YORK, Dec 27 (Reuters) - U.S. mortgage applications plunged last week to the lowest level in nearly five months, dragged down by a tumble in demand for home refinancing loans as interest rates nudged higher, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended Dec. 22 decreased 14.2 percent to 555.8, its lowest level since early August. The index stood at 647.6 in the previous week.

The group's seasonally adjusted index of refinancing applications dove 18.5 percent to 1,604.6, its lowest since early September.

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-12-27T120005Z_01_NAT002350_RTRIDST_0_USA-MORTGAGES-MBA-URGENT.XML

 
At 3:42 AM, Blogger JuliusCleaver said...

Mortgage levels usually always drop in December. No surprise there. As far as builders building for less than $100 per square foot, that depends on which area of the country you are discussing. It varies, and widely. The fact remains that there have been housing declines even before this so called bubble and they occurred over several years. The run up in real estate prices went too far, too fast in some areas and there are some areas I expect to take a tumble. There are some other areas I expect to keep moving up and they are doing so as you review this Blog.

 
At 7:54 AM, Blogger Al said...

I just sold my home in San Diego, thank god !!!!!. I have bought and sold 9 homes in California for the past 25 years and have always made a profit. For the first time since 1980, I will become a renter. This does not suit me will but the only reason prices got out of control, is that we had interest only loans and buyers who were moving up. These 2 things have stopped. I had a 4.125% interest rate for 5 yrs, unheard of today. I truly believe we are not at the bottom yet. Those that say we are, are in denial. In the stock market its called pump and dump. Two weeks ago, a new home was on the market for $1.467 million, I offered 950K, yes 950. They came back to me and offered the home to me for $1,050K. As good as this sounds, I could not take the home. I firmly believe, in California, we will get back to the level of prices we had in late 2002. Patience is needed. I will be a Renter for now.

RFN

 
At 7:54 AM, Blogger Al said...

I just sold my home in San Diego, thank god !!!!!. I have bought and sold 9 homes in California for the past 25 years and have always made a profit. For the first time since 1980, I will become a renter. This does not suit me will but the only reason prices got out of control, is that we had interest only loans and buyers who were moving up. These 2 things have stopped. I had a 4.125% interest rate for 5 yrs, unheard of today. I truly believe we are not at the bottom yet. Those that say we are, are in denial. In the stock market its called pump and dump. Two weeks ago, a new home was on the market for $1.467 million, I offered 950K, yes 950. They came back to me and offered the home to me for $1,050K. As good as this sounds, I could not take the home. I firmly believe, in California, we will get back to the level of prices we had in late 2002. Patience is needed. I will be a Renter for now.

RFN

 
At 7:55 AM, Blogger Al said...

I just sold my home in San Diego, thank god !!!!!. I have bought and sold 9 homes in California for the past 25 years and have always made a profit. For the first time since 1980, I will become a renter. This does not suit me will but the only reason prices got out of control, is that we had interest only loans and buyers who were moving up. These 2 things have stopped. I had a 4.125% interest rate for 5 yrs, unheard of today. I truly believe we are not at the bottom yet. Those that say we are, are in denial. In the stock market its called pump and dump. Two weeks ago, a new home was on the market for $1.467 million, I offered 950K, yes 950. They came back to me and offered the home to me for $1,050K. As good as this sounds, I could not take the home. I firmly believe, in California, we will get back to the level of prices we had in late 2002. Patience is needed. I will be a Renter for now.

RFN

 
At 5:33 PM, Blogger nocklebeast said...

I suppose if he continues to say it every month, he'll be right eventually.

 
At 10:48 AM, Blogger redmanblogger said...

Very good $ analysis of RENT VS BUY:

http://michaelbluejay.com/house/rentvsbuy.html

 
At 1:00 PM, Blogger Joseph J. Ravitsky said...

nice job on the write up in the WSJ...it is unbelievable that economists like this are being bought and are spewing false information to the public... I agree with you that we are at the beginning of a housing bust that may put the tech bubble to shame...personal income just went up 0.3%, how does America respond... they take that money right back to the stores...the American consumer is in for a reckoning... I try to talk about these things on my blog too...

 
At 9:00 AM, Blogger BxCapricorn said...

Hey, al, STFU. Got you the first time. I think the bubble is more like a sheen, and the worst is over....huh...am I Lereah or what...c'mon people...50 percent of your take home pay should be tied up in your mortgage payment...hey, I'm an economist {did i spell it right?}. I mean ECONOMIST, with capital letters! Two more years, and all this BS will be over with. God bless America.

 
At 3:39 PM, Blogger JuliusCleaver said...

http://www.usatoday.com/money/economy/
housing/2006-12-28-existing_x.htm

Sales of existing homes up again
Updated 12/29/2006 12:06 AM ET E-mail | Save | Print | Subscribe to stories like this Subscribe to stories like this

From staff and wire reports
Sales of existing homes edged up for the second month in a row in November, the latest proof that the real estate downturn is coming to an end, the National Association of Realtors said Thursday.

The NAR said sales of previously owned homes rose 0.6% from October to November but were still down 11% from a year ago.

That news followed a report Wednesday from the Commerce Department that said new-home sales jumped a surprising 3.4% in November, the third gain in the past four months.

"It appears we've hit bottom," said David Lereah, the NAR's chief economist. "The price drops are necessary to stir sales. It is working."

The median price for existing homes fell for the-fourth consecutive month. In November, the median price — where half sold for more and half for less — for an existing home was $218,000, down 3.1% from a year ago.

For single-family homes, the median dipped 3.6% to $217,200. For condos, the median price was flat at $224,600.

Lereah expects prices to continue to drop in December and probably for the early part of 2007. The problem is that sellers, faced with a 7.3-month supply of homes on the market, have little choice but to cut prices to attract buyers.

"We've entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down," Lereah said.

He predicts existing home prices will be down 9% in 2006, and down an additional 1% in 2007.

However, there are bearish economists, such as Dean Baker of the Center for Economic and Policy Research, who still expect the correction in the real estate industry to continue and lead the economy into a recession next year.

"I don't really see how consumers can maintain their rate of spending," he said recently. "I think we might have a very severe recession."

Nevertheless, November's slight gain in existing home sales was driven by stronger sales in the Northeast, up 6% from October, and the West, up 0.8%.

Sales were flat in the Midwest and down 1.6% in the South.

Contributing: The Associated Press, Bloomberg News

 
At 8:14 AM, Blogger Nikki said...

David,
Congrats on your first REIC troll on the DLW blog. You've earned it. Could juliuscleaver be Lance starting over?

 
At 11:03 AM, Blogger JuliusCleaver said...

Could Nikki be a loser troll? Yes.

 
At 1:56 PM, Blogger Rich H said...

David Lereah = Ken Lay!

Last time I checked, “Realtor” is just a fancy name for “Broker”.

With that said, if a broker were to ignore data, and give investors incorrect/misleading information, those brokers could potentially face losing their license, paying fines and even face incarceration. In real estate, home “buyers and sellers” are the equivalent of “investors”.

When the head of an organization that serves as a figurehead for brokers/realtors gives misleading information, it could not only hurt the individual investor, but it could ultimately hurt the public and the entire US economy! Enron’s Ken Lay, and countless other organization heads have recently tried manipulating or deceiving the public. Kenneth Lay ignored data that clearly pointed out that Enron was in financial ruin and was punished for his actions.

MSNBC News Services
Updated: 9:15 p.m. ET May 25, 2006
“In a devastating verdict, Lay and Skilling were convicted of a total of 29 criminal counts, including a conspiracy to hide the failing health of the company by selling a boosterish optimism to Wall Street and the public.”
Granted, Ken Lay is an extreme example of comparison, who committed quite a few additional crimes…
…but how does what David Lereah’s doing differ???

Lereah’s unrealistic optimism, despite glaring negative facts, has given the home sellers continued unrealistic expectations. As these houses sit on the market for extended periods of time, many of their values slide. These sellers continue to keep their faith in the market because of these expectations that are stated by its industry figurehead’s. The scope of Lereah’s misleading the public goes beyond just the home buyers and sellers (whom are the markets investors).

What about investors in the Mercantile exchange, that are investing in housing futures??? Isn’t Lereah misleading them with his spin doctoring?

What about the NYSE corporate investors, day traders, stock brokers, etc, that look to invest in Pulte, Lenner, Centex or Toll Brothers. Isn’t Lereah misleading them with his spin doctoring?

Even the brokers/realtors he represents will be hurt. With the glut of realtors in the industry, and the reduction of house sales, their industry will fall on hard times that parallel the auto industry. Isn’t Lereah misleading them with his spin doctoring?

Ultimately, the housing sector could’ve had a softer landing had it not spun so far out of control in the last couple of years. For Lereah not to acknowledge this, and actually make attempts at even furthering how far it spins out of control is unthinkable! But things tend to spin out of control, when spin doctors are at the wheel!

The public and its investors need to hear the truth. Numbers don’t lie, but unfortunately the people who use them do. …and people like Lereah, and corporate heads that benefit from the booming housing market cannot be trusted to manipulate the numbers for their own benefit. Lereah has to be made to acknowledge and realize that his opinions and statements have an affect on market conditions. He cannot be ignorant to the fact that his industry is heavily influenced by speculation. He cannot fall back under the umbrella of “he was just being optimistic”. Instead, he has to be realistic!

Lereah needs to be held accountable for his exploitation of the truth.
With this said, how does Lereah’s misleading the public differ from Ken Lay’s?!?!?!

 
At 8:46 PM, Blogger AnalysisGuy said...

You guys are over reacting we have hit the bottom - of the Q3:2006! We're heading down!

By the way, I just shotup the Phoenix Report and changed the entire thebubblebuster.com website.

Additionally, the NEW thebubblebuster.com contains historical data for another 20+ cities. Check it out...

 
At 2:22 PM, Blogger Dr Housing Bubble said...

I didn't realize there were ten bottoms. Maybe it is like purgatory and you have to descend to various levels. David Lereah is so brilliant that maybe he has a take on Dante’s Inferno that us lowly people do not understand.

I read an article this weekend in the L.A. Times talking about how the correction has already come to pass. Come to pass? Did we all miss it? When did it happen? It is almost as if we missed the bottom and now we are on the up and up. Of course, these folks are betting on the housing fairy to come this spring and summer which I doubt. I think the punch has finally ran out.

Dr. Housing Bubble – How I Learned to Love SoCal and Forget the Bubble

 
At 10:11 PM, Anonymous land investor said...

This guy never ceases to amaze me...I hadn't heard of him til I stumbled across this blog, and I'm glad I hadn't.

 
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