David 'soft landing' Lereah's condo investments located in the Wasgington, DC metro area are also starting to depreciate in value at an even faster clip. [Zillow still has a some inaccuracies, but this valuation looks right]
David Lereah is the former Chief Economist and Senior VP of the National Association of Realtors (NAR). Between 2001 and 2007, Mr. Lereah regularly made statements regarding the housing bubble. The media regulary turned to him for real estate quotes. He was very influential. Mr. Lereah tells half truths and manipulates facts and figures. He cannot be trusted as he was a paid shill.
Mish's Global Economic Analysis takes on David Lereah.
Of course Greenspan has company with his call. Please consider statements made by David Lereah, head cheerleader for the National Association of Realtors: "There is no real estate bubble.
At times David Lereah appears to have a grasp of the underlying facts, yet manages to come to all of the wrong conclusions about what is happening and why. No one should be surprised by this. David Lereah is a paid cheerleader for the National Association of Realtors, not a real economist.
"The housing market peaked in August", said David Lereah, chief economist for the real estate group. "This may be the bottom. It appears May is a little better"
The Boca Raton News had this to report on the latest statements by David 'soft landing' Lereah.
Lereah was quick to make his message clear: "You don't need a boom for real estate to roar. The real estate boom is over but the real estate expansion is still here." Although homes are not selling as quickly right now, prices are still up. "There are no real estate bubbles, only balloons that expand and contract," he saidDavid Lereah is basically saying slow appreciation. Certainly there will not be slow appreciation in bubblicious Boca or other bubble markets.
"Forty percent of all home sales in 2005 were second homes - investment properties and vacation homes - compared to about 9 percent 10 years ago," Lereah said.
"Real estate is not an irrational investment, but speculators purchased irrationally during the boom, especially in areas like Miami. This drove prices up, and many speculators took out interest-only loans. This produced a vulnerable real estate market," Lereah explained. "In 2006, we are cleansing the market of speculation."
In 2007, Lereah believes that the real estate market will continue to expand even if mortgage rates increase to 7 percent. "That is still low," he said.
Buying real estate has advantages, too. "It is the most leveraged asset and there are tax advantagesÂ Real estate needs to play a role in your investment and retirement portfolio. You should diversify," Lereah said.Wow, now he isreally going out on a limb. Remember the fundamentals. But can they afford the overpriced housing units?
He added that he is bullish on Florida, Arizona and Nevada because of even greater population increases. "The law of supply and demand works."
Looks like he may loose money as well during the bubble. I wonder how much money Mr. Lereah has invested in RE.
All of Lereah's real estate investments are in condominiums and townhomes because he doesn't want to be involved in maintaining them. "If you're Mr. Fix It, then it's okay to invest in a single-family home," he said.
Lereah also pointed out that he has invested in several condominium conversions. "Condo conversions are good because the property is already there."
“‘It’s going from a seller’s market to a buyer’s market,’ said David Lereah, the chief economist for the NAR. In March, ‘price appreciation went down to 7.4 percent, from over 10 percent,’ he added. ‘That most probably reflects that sellers are bringing their prices down.