Tuesday, February 27, 2007

Mr. Lereah has been hemming and hawing

"For the last several months I have been hemming and hawing on whether we have reached bottom," said David Lereah, chief economist for the Realtors. He said that the January report was an encouraging sign that the bottom for sales activity was reached last September with sales expected to stabilize this year. (Source: The Times and Democrat)

Monday, February 19, 2007

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.

Thursday, February 15, 2007

Zillow: David Lereah's House Declining In Value

David Lereah's primary residence, like other houses in the Washington, DC metro area, is losing value. According to Zillow the peak price for Mr. Lereah's house was 959K in June 2006. Since then the price has declined about 11% to an estimated (Zestimate) price of 852K.

It is ironic that David Lereah's house is losing value while he is busy declaring the bottom of the housing bubble every few months.

Mr. Lereah lives in a large 5 beds, 5.5 baths, 3,068 sq ft located in the outer suburbs. Mr. Lereah's property tax assessments on this house were $7,520 in 2006.