David Lereah's Condo Investment Goes Bust
David Lereah has invested in multiple condos in the Washington, DC area as well as in some undisclosed(s) location in bubblicious Florida. One of his investment properties is located at
4551 Strutfield Ln, Alexandria, VA.
Alexandria, VA is an inner suburb of Washington, DC. Mr. Lereah's condo unit is located at the PALAZZO AT PARK CENTER. Mr. Lereah does not live there. This is an investment property and not his primary residence.
He bought the 1br 1bth condo on April 1st, 2005 (April Fools day, How appropriate!) for $276,900 and includes 1 parking spot. It is a recently built garden style building. The condo units has 726 sq. feet. (Source: Alexandria, VA Real Estate Assessments Database)
Here is the price chronology of the condo unit:
2005: Property Assessment: 245,700
April 2005: David Lereah Buys Unit for 276,900
2006: Property Assessment: 271,500
2007: Property Assessment: 248,977
Under Virginia law, property assessment are valued to be at "100 percent of fair market value. The Virginia Supreme Court has provided the following definition of fair market value: The fair market value of a property is the price which it will bring when it is offered for sale by one who desires, but is not obliged, to sell it, and is bought by one who is under no necessity of having it."
Mr. Lereah bought the condo unit for $276,900 in April 2005. In 2007 the condo was assessed at $248,977 which is a loss of $27,923. This represents a price decline of 10% (nominal dollars).
It is fitting to see the drop in value of David Lereah's Alexandria condo. He bought just a few months away from the peak bubble in the Washington, DC area. Mr. Lereah clearly made a bad investment decision.
posted by David @ 11:42 AM
13 comments
13 Comments:
Love it. Great post. Mr. "Anti-bubble reports" Lereah is getting his due. Not only is the assessed value dropping, but recent actual comparable sales are lower than his purchase price.
The latest sale for a like model was for $259k. Here it is:
http://realestate.alexandriava.gov/detail.php?accountno=50704220
That's $17k or 7% less than he paid. Chances are, most of the "equity" from his downpayment is wiped out. And this is just the beginning of the burst.
"This is a great example of how David Lereah actually believed his own Bull Shit! "
Maybe he did back then!
Yes, I think this proves that while people might not like David Lereah, it isvery possible that he believes his own B.S.
It would be far worse if we saw that he unloaded units while telling people to buy. (Ala the internet bubble days).
I looked up this condo and found one similar to his.The seller lost about $40,000 unloading a similar unit.
Frank- Broker FranklyRealty.com Virginia
More at: BLOG.FranklyRealty.com
Please, please, please let someone ask Lereah about this investment the next time he does a conference call with reporters.
That would be so sweet.
Anyone know where David Lereah bought his Florida condos?
What amazes me more is that the chief economist for the NAR is dabbeling in condo flipping and single unit investments. It almost seems childish...
I guess this confirms that Lereah is simply an idiot, rather than a crook?
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Anyone know where David Lereah bought his Florida condos?
Tampa
Anybody know how much of the condo was financed? Or the portion put down?
"Please, please, please let someone ask Lereah about this investment the next time he does a conference call with reporters"
you should send this data to the reporter at CNBC, Diana Olick, who does realty check and have her ask DL. She often interviews him for the show.
http://www.cnbc.com/id/15837671
David L. must be one of the last " Bubbelonians"
A little inconsistent data with the bar graph. You can't equate the county assessed value with the market value he bought it for. You've got to look at apples to apples. Only distressed sellers sell their home for close to or below "assessed" value. Everyone knows that. The assessed value is still higher now than when he bought in 2005. Granted it is not 2006 but it is not below 2005. Look closer at the real estate section of the Alexandria City webpage under Strutfield Lane. Most of the time there is an abnormally low prices it's because people are either relocating or defaulting with Fannie Mae taking over it - not a true sale indicative of the market. Did you see that that complex is right next to the Pentagon? In the homeland security world we live in today there's probably steady demand for real estate in that area from the Pentagon employees if you ask me. Can't say that is the case for his place in Florida - job market isn't even remotely comparable. That's a disaster without question.
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