Wednesday, May 16, 2007

Lereah: It was My Publisher's Fault

David Lereah was interviewed by ROBERT SIEGEL of NPR.

ROBERT SIEGEL, host: But to put this in some context, you have been a positive voice for real estate. So much so that a couple of years ago, you published a book in 2005 whose original title was "Are You Missing The Real Estate Boom" .... the subtitle of that book was "Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade." What went wrong? Where was the point where you stopped seeing real estate values going up through 2010 and something happening to it instead?

Lereah: Great Question! First the boom was Double Day Random House Word that ..

Seigal: that your publisher, you are telling me

Lereah: .. put on the title. It wasn't my title unfortunately. So it was a poor choice of titles.

Siegal: You are not the first person with that excuse in this studio.

Lereah: But if you actually read the book. I say the boom is not good, it cannot sustain itself. I actually redefine boom to be a healthy expansion.

Siegal: Well wait a second. But in the cover of the book you said it would be the "golden age' of real estate.
A most interesting exchange. It is amazing to see the press actually press David Lereah for the his bad relentless cheerleading, his half truths and bad predictions.

Reaction: David Lereah Leaves the NAR

Across the internet the reaction was mixed to David Lereah's imminent departure from the National Association of Realtors. Reuters started their article with "The economist who prodded investors into the U.S. housing boom and has been skewered by bloggers during the bust is leaving a top real estate trade association, the group said Monday."

I have added my own bolds to the sentances and staements, I found to be the most interesting and or telling.

David Lereah's coworker, Lucien Salvant, said that "David has been an expert in the field, is widely respected and has been an excellent spokesman for NAR."

"Blanche Evans, the editor of Realty Times, an online magazine for real estate professionals, said Lereah's outlook for the market is a reflection of his sunny disposition. "That is part of his personality. He is one of the most bright and energetic people but that does not mean that he's a Pollyanna," said Evans, author of "Bubbles, Booms and Busts: Make Money in ANY Real Estate Market."

Others were critical of Mr. Lereah. They took him to task for his shilling. They were strong critical voices emmintaing from the blogosphere, the media and beyond.

Housing bubble blogger, Marinite wrote "Today is a bitter-sweet day for this blogger. As you may already know, David Lereah, chief "economist" for the National Association of Realtors (NAR), he who has frequently been a target of ridicule and an endless source of entertainment for me, has finally been booted from the NAR. First it was Greenspan and now it's David Lereah to jump ship before the shister hits the fan. In any event, I should think the US real estate industry has breathed a collective sigh of relief as no single person has done more to discredit the REIC than David Lereah IMO."

Andrew Leonard writes that "David Lereah, the chief economist for the National Association of Realtors, a man who has been mocked many times in How the World Works and elsewhere for his relentless optimism about the housing market, even as it was imploding all around him like a giant Florida sinkhole, is stepping down from his position. (Thanks to Calculated Risk for the tip.)"

On LA Curbed in a post titled Bloggers Dance on Lereah's Grave "Ding Dong the Witch Is Dead. The Wicked Witch of the National Association of Realtors, that is. David Lereah, one of the most despised economists in the blogosphere, at least the small cul-de-sac of the blogosphre consisting of bubble-watching blogs, has stepped down from his position at chief economist at NAR. How despised is he? He's been called a liar, a back-pedaller, a paid shill, and has even inspired his own de-bunking blog, David Lereah Watch. How has the news that he's leaving NAR and joining Move Inc. been received? Says David Lereah Watch: "Soon, Mr. Lereah will be much less quoted in the mainstream press. Mr. Lereah's reign of half truths, manipulations and cheerleading will soon be over." We're sure they wish him all the best in his new venture. And by all the best, we mean complete and total, humiliating, public failure."

In the WSJ Market Beat blog, David Gaffen writes "The ultimate industry cheerleader is moving on. David Lereah, chief economist of the National Association of Realtors, who became known for sunny pronouncements about the housing industry despite the market’s steady decline, will now be at The company describes itself as “the media leader for finding, improving, and enjoying your home.” Its founder, Allan Dalton, says Mr. Lereah “has established himself as the ultimate expert for the real-estate industry.” It’s an unverifiable statement, but evidence suggests otherwiseyour mileage may vary."

Seth Jayson, from the Motley Fool, who is critical of Mr. Lereah wrote:

I've written over and over again about the housing-market pumping in which National Association of Realtors Chief Economist David Lereah has engaged. His ability to make bad predictions was, to my mind, only surpassed by the magnitude of his bombast, or perhaps his ill timing.

This is a guy who looked at dwindling numbers from the likes of Hovnanian Enterprises (NYSE: HOV) and KB Home (NYSE: KBH), saw subprimes melt down at New Century Financial, watched Alt-A get worse for the likes of Indymac (NYSE: NDE) and Motley Fool Income Investor pick Washington Mutual (NYSE: WM), yet consistently told the press that all was well. I still have no idea how self-respecting business journalists anywhere could have parroted his biased misinformation for so long.

For those of us who simultaneously looked forward to and loathed his monthly trade-group propaganda, today is a day of mixed emotions. Apparently, Lereah is moving on to Move (Nasdaq: MOVE). Move runs Internet real estate sites, something I think is a pretty bad business to be in, unless you're The Google (Nasdaq: GOOG) and can throw something together that just might up-end the entire apple cart. According to an NAR press release, Lereah will be in charge of a new venture. Note to self: Look at Move and get ready to short.

The The Kingsland Report states that "First, I realize this news is a bit old, but while I was climbing hundreds of stairs in an 1859 lighthouse yesterday some of the best news of day broke that real estate cheerleader extraordonaire, David Lereah, tendered his resignation as Chief Economist of the National Association of Relators. HUZZAH! The David Lereah Watch Blog does a great job summing things up. While it was bad enough that Lereah would constantly be spinning and telling us tall tales about things being so great in real estate, his manufactered reality actually hobbled the members of the NAR - yes, the realtors themselves. Lereah's gleeful assessments of the real estate market, picked up in the national press, led many home-sellers to insist their Realtors list their homes at inflated prices which would just keep them languishing in what were really ailing markets. It won't be soon enough that Lereah moves on to Move Inc. Let's hope the NAR will pick a new public face that will help its Realtors help their customers to make better decisions and not disasterous ones. Of course, there are hundreds of other Lereah like characters out there who will continue to pump, mislead and cheerlead, but Lereah was unusual for the amount of access he had to the media."

On Bankrate's Mortgage Matters blog: "MOVING ON: Among the subculture of housing bubble protagonists, the most reviled figure is David Lereah, chief economist for the National Association of Realtors, and author of the 2005 tome, "Why the Real Estate Boom Will Not
Bust. The bubblemeisters won't have Lereah to kick around anymore. "

Housing Doom declares "Bubbledom, Rejoice!" and goes on to ask "The big question is, do they replace him with a real economist, or another cheerleader? Perhaps Lawrence Yun replaces him, and things will go on as usual."

One commentator on the Housing Doom blog, NVMike, wrote "Lereah became a huge liability for the NAR. He’s the subject of tremendous ridicule all over the Internet - from his prior books (Worst. Timing. Ever!) to his monthly “we’ve hit bottom!” predictions that began a full year ago. The NAR had to get him off the TV and out of the papers. No one believed him anymore. In recent appearances, other guests and even the moderators / interviewers would shake their heads in disbelief at his responses and forecasts. Lereah turned himself into a real-life Joe Isuzu! "

Economic Despair has a superb post on David Lereah's departure.

The story of David Lereah, the NAR's former chief economist, reflects the highs and lows of the US housing bubble. Back in 2004, he was the chief cheerleader for the NAR, talking up housing, and promising everyone the future of eternal price appreciation. His books were bestsellers and as a speaker he was in constant demand.

Like house prices, his economic forecasting gradually departed from fundamentals. However, house prices were the first to begin a correction. As a bubble began to burst, Lereah's forecasts became increasingly absurd. He called the bottom no fewer than four times. As each month produced more and more depressing data on the housing market, his optimism was irrepressible. Each NAR press release protested that the current slowdown was only temporary and that things will improve shortly. However, his credibility began to diminish and this reflected upon his employer, who weren't prepared to look foolish for his sake.

It looks like David Lereah blamed the housing crash on the weather just once too often. The NAR leadership realised that he had to go. While the precise details of his departure are a matter speculation, it is not hard to imagine a gentle conversation where David is asked politely to leave in a media friendly manner.

In some respects, Lereah's departure marks an unprecedented degree of public accountability. In the past, Lereah could safely make his absurd comments without any fear of losing his job. Today however we have the housing bubble bloggers, who unlike the mainstream media, are prepared to question self-interested commentary from pressure groups like the NAR. Lereah and the NAR were held to account for what they said, and where they were found wanting, the bloggers demanded the truth. Ultimately, the bloggers made Lereah a liability for the NAR that his why Lereah was pushed out.

In this regard, three bloggers deserve particular mention; housing panic, the bubblemeter and David Lereah watch. Today is a victory for them and the truth.
Thanks for the praise. Actually, the blogger behind David Lereah Watch is also the same blogger for Bubble Meter. Blog declares that "It's The End Of An Era: Lereah Is Out At NAR!" and goes on to write that "I can't believe it, really. Who will the Realtors possibly get to regale us with tales of how the stars are aligned, how the market has bottomed out, or how unsophisticated it is to pay off your mortgage? I have to give mad kudos to David Lereah Watch for the unrelenting dogging of this most obvious shill for the scam that was the housing bubble. Good riddance to bad rubbish. I'm just amazed he didn't say something like how he wanted to spend more time with his family. ;) "

Thanks so much for the praise. :-)

SOCAL Bubble opines "Discredited David Lereah is leaving the NAR after making blunderous predictions on the future direction of the housing market."

Keith at Housing Panic who has probably been the best ally in th struggle to discredit Mr. Lereah.

The excuse Blanche Evans, Realty Times Deceiver in Chief, gave for TCDL's lies are especially galling, blaming his distortions on his having a "sunny personality". For all I know TCDL is a nice sunny guy. But that doesn't excuse the lies and deception, and doesn't excuse the horrific mess he personally helped create. TCDL helped ruin lives folks. What TCDL did was evil.

And Miss Evans, a note for your reference, REAL economists don't lie, distort and deceive. They use theories and evidence to try to come to understandings and the truth.

FAKE economists, like whoever the NAR employs, are paid liars who manipulate data to fool the American people into thinking it's always a great time to pay a real estate clerk a commission.

Have you no shame?

Meanwhile, nice to see Reuters pick up on David at davidlereahwatch. I'm tellin' ya, the NAR and realtors around the country probably have "how can we silence the bubble blogs" meetings. And they know their days are up, because they can't.

Here's a special HousingPANIC going away message for our old friend, The Corrupt David Lereah (please feel free to add your own HP'ers):

TCDL, we'll sure miss you around here. Yes, you may have been doing the bidding of your evil masters at the NAR these past few years with your lies, deception and spin. And yes, you may have blood on your hands, someone who'll go down in history as enriching himself at the expense of others.

But it sure was one heck of a ride.
David Lereah's days at the NAR are now over. Mr. Lereah's legacy, as cheif economist, at the National Association of Realtors (NAR) will be one of half truths, manipulating facts and figures, and being a paid shill. His prominent position has ended and his influence on the real estate market will be much reduced.

Sunday, May 06, 2007

Lereah: "We're in a Real Estate Recession" Etc.

David Lereah speaking with a reported from the Chicago Tribune had many things to say "We're in a real estate recession." I actually agree with Mr. Lereah! Wow! Lereah stated:

"I'm projecting the first [nationwide] price drop since the Great Depression," he said. "We're going to have negative home prices in 2007."
Is Lereah finally coming clean? Is Lereah really saying things that reflect reality?

In the Chicago Tribune Article the David Lereah Watch was quoted:
"The media regularly turns to him for real estate quotes," said David Jackson, who created the hypercritical David Lereah Watch blog because he believed the economist was churning the housing market. "Lereah tells half-truths and manipulates facts and figures. He cannot be trusted, as he is a paid shill."
In response Lereah shrugged off the criticism stating "I feel confident I did a very good job forecasting and reflected what was happening in the marketplace .If anybody actually took the time to read my book, rather than just comment on the title, I was insistent in it that ... a frenetic boom was unsustainable. I predicted a downturn [would occur] shortly after I wrote it, in 2005,"

"But first he has one more public appearance, at a Realtors' conference in Washington. He warns that his speech will not be cheery."

"I am going to say, look, guys, we all have to face the music," Lereah said. "We strayed from [economic] fundamentals, and we're paying for it. It's not an all-out bust, not a crash in real estate, but it is a recession. This is going to cleanse the markets and in the long term this is what we have needed.

Nonetheless, he said housing's long-term prospects are good. "I am the cheerleader for real estate," he said. "I will always be the cheerleader. I think it's the best investment anybody can make."

"In characteristic cheerleader style he demurred when asked whether he ever felt pressure from within NAR to skew forecasts in a positive direction."

"You'll have to talk to me about that in two or three weeks," Lereah said. "I work for NAR now."

Wednesday, May 02, 2007

The Blog In Transition

Within a few weeks, David Lereah will no longer be working for the National Association of Realtors. He will be much less quoted in the mainstream media. What are the plans for this blog?

Posts are expected to be much less often. I would like to follow up and track Mr. Lereah's real estate investments, but this will probably be once every 6 months. If he his quoted by the mainstream press on the housing market, he will be watched on this blog.

The blog will continue to operate as documentation of the destructive housing bubble.

Why did you start this blog? Why do you care?

I started this blog for two reasons; economic activism, and because it is enjoyable. I strongly believe that paid shills, like David Lereah need to be taken to task for their half truths, manipulations, and destructive cheerleading.

Is there anyone you want to thank?

My fellow housing bubble bloggers deserve much credit for helping to expose David Lereah. Particularly, Keith from Housing Panic. Keith is a true ally in helping to discredit Mr. Lereah. Also, thanks to all my readers.

What do you have say to those who say Mr. Lereah was just 'doing his job' as a spokesman for the National Association of Realtors?

It doesn't really matter. Mr. Lereah's is still liable for half truths, fact manipulations, and destructive cheerleading. The housing bubble was a gross misallocation of capitol. It will have negative effects on our economy for many years to come. Mr. Lereah led people into irrational exuberance.

Will you be launching a new blog to track Mr. Lereah's replacement at the NAR?

No. I will be not be launching a new blog to track Mr. Lereah's successor. However, that blog is very much needed. I fully encourage someone to take up the flashlight and shine it brightly.