Lereah Calls Bottom For At Least The Fourth Time
David 'Paid Shill' Lereah is now claiming the the housing market is doing a whole lot of scratching and that housing had hit bottom.
"Sales have hovered for the last four months, scratching bottom and then coming up, scratching bottom and coming up again. We are comfortable this is now the bottom"Due to all this scratching going on, perhaps, David Lereah is confused and has falsely called the bottom multiple times. This was his fourth time calling bottom (that I am aware of). Mr. Lereah has called the bottom on the following dates:
- May 25, 06: "This may be the bottom. It appears May is a little better." (Real Estate Journal)
- September 25, 06: "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." (Bloomberg)
- Dec 29, 06: "It appears we've hit bottom, the price drops are necessary to stir sales. It is working." (Globe and Mail )
posted by David @ 5:32 PM
31 comments
31 Comments:
More like a chicken scratching the ground looking for one last worm.
Keep up the good work!
Thank You max! I will continue working hard to discredit David 'The Paid Shill' Lereah.
This comment has been removed by a blog administrator.
David,
I have an interesting idea. You already follow the values of some of David Liareah's investment properties.
I think it would be interesting to find out as many as you can, and follow them closely. See if and when Mr Liariah tries to put them on market. (Hope he does'nt try to unload one of them on his mother, telling her that prices are low, it is a great investment opportunity)
Or if he for the obvious reasons, just decides to lose them to foreclosure. It should make some great headlines.
Keep fighting the REIC!
There are 10 factors leading to recession in 2007, and guess who holds the #1 spot?
http://infohype.blogspot.com/
David,
Can you superimpose Lereah's face on Baghdad Bob and place it on your cover page. That would be great.
"The Americans are not in Iraq."
i think david is scratching his bottom , or at least thats where the words are coming from :)
Also, the NAR is now PUSHING BACK its forecast of the housing recovery from mid-June to the end of the year. My bet is that they will continue to push this back 6 months for the next three years.
Further, it's good to know that journalists are actually catching on to the NAR. I've seen on a few occasions the disclaimer that the NAR "often has a sunnier view of the housing markets."
Good work people!
Thank you for keeping this list! It will be even more amusing as time goes on.
If he keeps calling the bottom every month, one of these years he'll actually be right!
There are 10 factors leading to recession in 2007, and guess who holds the #1 spot?
http://infohype.blogspot.com/
In most of the housing market analyses I read, including the one you quoted above, everybody says the problem is too much supply.
The primary problem now plaguing the housing market is one of oversupply, rather than a general economic malaise.
Nobody is discussing the sharp contraction in demand that has to occur because much of the prior year or two’s demand was artificially inflated due to sub-prime and Alt-A mortgages. A recent article in the Wall Street Journal reports that 40% of all mortgages originated last year were either sub-prime or Alt-A mortgages. If you reduce the approximately 8 million mortgages that were used to purchase homes last year by 40%, we have a very serious demand problem. Now a 6 to 7 month supply turns into a 10 to 12 month supply. Oversupply can be quickly absorbed with strong demand, but dramatically deteriorating demand turns the situation bleak. And it doesn’t seem that strong demand will return any time in the forseeable future. It seems like the residential real estate market is sliding into the abyss.
Oversupply might not be such a big deal but in this day and age of hyperleveraged economy, which contains hyperleveraged consumers and hyperleveraged businesses, a sneeze can turn into pneumonia.
In ancient times, like, 50 years ago, when the country went through a recession, people and businesses had savings to fall back on to survive the lean times. Now even a "mild" downturn can end up meaning catastrophe to the parties who thought they were being clever utilizing all that leverage.
David Lereah will continue to paint a rosy picture. It's his job, he is paid big money to establish consumer confidence in real estate. As an economist he knows what’s coming, but his job is to be a marketer and that's what he does. Do not pay attention to his comments they are irrelevant. It's the same story that goes on in the corporate world, people cover 20 minuses and only talk about the 5 pluses.
I love this site! Jeez, why hasn't Lereah run for public office? He'd be great, can lie with the best of 'em
Interview with "Mr. Dave"
Lereah keeps taking the rope, winding it into a noose, putting his head in...
This concept I hear of a 5 months supply or an 8 months supply of houses sounds fishy to me. Correct me if I am wrong but I read that the # months supply is figured by taking ”Current Inventory” /“This Months Sold Houses”= “Number of Months Supply”.
That only works out if both numbers remain constant or close to it. Sales are flat or dropping and current inventory is growing. New tracks are still coming on the market which one can reasonably predict. But, forclosures are much harder to pridict we do know they are going to be high. We also have a phantom inventory that is very large and about to be unloaded. The phantom inventory is all the flippers/owners that wanted to sell in Q4/2006 and Q1/2007 but are holding back till things get better in spring. My god we still have flippers trying to move inventory that still sits out there, if the flippers can hang in there this long you know the owner hanging on by a thread are still in the game. Worst all flippers are still trying to make a profit on a flip even with a NOD a week away.
We ain’t going to hit bottom till the flippers hit bottom.
The catch 22 of being David Lereah. The sellers/flippers really do listen to him, he is their economic guro and if he says the bottom is in they figure they can hold out for another month for prices to rise. They hold out, prices remain flat thus no inventory moves and more homes get forclosed upon, thus the cycle continues. His words are in nature a non-fulfilling prophacy.
If David says “No Bottom now and none for at least 9 months” all the sellers would loose hope, engage in panic selling and we might hit bottom in three months.
So the bottom is now determined by sales, not prices? I guess as home prices continue to drop, as long as sales don't drop, he'll keep saying that it's the bottom.
Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.
http://www.newsmax.com/money/archives/st/2007/3/14/141015.cfm?MN=1
He is not alone in his predictions. The only way out is massive inflation and it may be too late for that.
It will not matter whether it is San Diego or New York. Welcome to the Great Depression(the 1930's will look like a picnic before this ends). Maybe now we can understand why Halliburton received a large contract to build detention camps in the United States.
I wonder how David will spin this story?
NEW YORK (Reuters) - House prices could tumble 10 percent this year and raise the chances the United States may slip into recession unless the Federal Reserve cuts interest rates to cushion the fall in economic growth, Merrill Lynch said in research notes this week.
If correct, the prospects of this scenario will prove troubling for equities investors, who could face a stock market decline of 30 percent or more as measured by the S&P 500 index <.SPX >, the brokerage said.
http://biz.yahoo.com/rb/070315/usa_economy_merrill.html?.v=2
I'm glad there's a lot of great informative comments of what's going on in real estate. I thought it was me for a while thinking "Dam" I must be on the bottom of salary earning indivuals. In the summer of 2005 when I was looking for my first home. I couldn't find anything I felt in my price range. Everything seem highly priced and less for my hard earned dollars. I don't remember how I landed here, but extremely glad discovering from various bloggs, that my fate is not to become mortgage slave! I have a bad taste in mouth for everyone related in the real estate family. I'm sitting on sidelines waiting and knowing today is not the day to purchase a home. I thank everyone for their insight keep up the great work and please don't stop! I hope David Liareah and everyone like him fall!
Bwahaha! Great work...But honestly, this time it is for real and this is the TRUE bottom okay?
Make sure to send your check to the N.A.R. and make it out to Papi Lereah. ;)
Cheers
Dr. Housing Bubble
You thought subprime was bad? Wait until you see what's next.
http://infohype.blogspot.com
I can't stand that used car salesman. I hope he get's fired. Naturally, he will have a HUGE golden parachute, but at least we won't have to listen to his ca-ca anymore.
Lot of bitter losers here.
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