Seriously, someone find where this guy is speaking next and let's get a tar and feather crew together
Even sadder is that the MSM reports this junk without challenging it. I guess all the blather last month from the NAR appealing to the big ol' mean Fed to stop raising rates was just blather, since prices are going up no matter what (per the NAR).
Here's the corrupt David Lereah's latest gems of wisdom:
Sales of U.S. homes will ease modestly but should stay within a narrow range for the remainder of 2006, a real estate agents' trade group said on Tuesday.
The National Association of Realtors (NAR) said in a monthly forecast that it expects sales this year of existing homes to fall 6.7 percent to 6.6 million units, the third highest yearly level on record, from 7.08 million in 2005.
NAR also said it expects new home sales to fall 12.8 percent to 1.12 million units from 1.28 million in 2005, and for housing starts to dip 6.8 percent to 1.93 million units from 2.07 million last year.
"We should see home sales rise and fall month to month, but don't look for any big shifts one way or the other," National Association of Realtors chief economist David Lereah said in a statement.
"The major housing indicators have been moving up and down within a reasonable range, which means the market should even out just below present levels," he said. "At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate."
July 18, 2006
David Lereah: "price appreciation will be at a normal rate"
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What an ASS! Too bad he is not liable for people taking his advice...
There are days when I almost believe this guy. . .
Despite the fact that SoCal has record number of listings (ditto Phoenix), the radio is now full of adds for 30 year fixed mortgages with INTEREST ONLY option for first 10 years. . .essentially, you can put off the problem for another 10 years - switch from an ARM to fixed, and then delay the repayment (HUGE) till 2016. . .kind of like the Federal Government. . .so maybe the mortgage industry will just keep coming up with new loans. . .how long can this go? When will we see huge drop in housing prices??. . .who knows. I get lots of reports about people in SD county who have taken their places off the market and are renting them out - sure at a loss, but they live in hope that prices will come back. . .people have a tremendous ability for denial!
Housing is a big tier in our national GDP and production of Jobs. The government has a vested interest in keeping the housing market afloat. Even during the Great Depression new homes were being built!
Normal rate of appreciation? Since most appreciation is inflation adjusted and not real I guess that is code that the government won't be as hard on inflation as Berneke and crew says.
During the depression we had deflation but those who had jobs actually saw their standard of living increase as they could buy more for less. In an inflationary cycle those with debt benefit while those with cash loose. Either way the economy will surive.
Most likely we'll see a German or Japanese style stagnation in homes but one of the problems in those countries was a stagnant population growth rate which we don't suffer from. Those governments have shelled out billions for unification and massive governement building projects and expanded thier money supply enormously to keep their econnomies afloat. The USA will do the same.
I bet more on inflation than deflation. We've generated inflation for 100 years. In the past 30 years the cost of a loaf of bread has gone from something like 25-35 cents to $2.50-3.50 a loaf. Homes from $25,000 to $250,000. Cars from a$2,100 to $22,000 or more! Wages? My dads 1962 wage of $6,000? He might get $60,000 today but what about those minimum wage dudes?
Homes will continue to "inflate" oh, they mean "appreciate" so if you think there will be inflation hold on to your hats (your property) and if you think there will be deflation then sell. Simple as that. Time will tell.
I am just waiting for prices to drop... it's only a matter of time.. i know plenty of buddies who are already in their late 20s waiting on the sidelines most still living at home. We are priced out of this market and so are all the younger peeps making their way out of college and into the work force.
I am not going to run out and drop $300,000 on a crappy condo. David Lereha is paid very well and probably could not say anything negative (due to some funky contract) unless it is passed by the board. Who knows??
Sales and hype is gone from my neck of the woods and already prices are at a stand still. The hot season is just about gone and soon I expect the inventory to begin climbing with price drops from people who need to sell fast.
I give it another bunk season and we will see some fair deals out there.
Fox, we haven't had typical inflation for a long time. We've had gigantic asset bubbles, sure, first in stocks and then in homes. But a key component in inflation has been lacking: wage growth, which has been falling behind general price inflation for a long time, except in the '90s. So one of the key benefits of holding onto a house during inflationary times has diminished -- paying a fixed mortgage payment for thirty years out of your increasingly inflated income.
I live in the Portland, OR/Vancouver, WA area and home prices have gone up the last few years due to the retirement migrations from California and those from California cashing in on their HELOC to buy homes and condos to flip. Things are beginning to slow down a bit and homes are taking a lot longer to sell and everyone wants to be a RE and sell homes. I did not buy when I moved here years ago because I was priced out of the market then and have rented my present residence for all of these years. Now I am approaching retirement. I don't have a home of my own (which galls my wife) but I will have a good retirement pension and a whopping 401K. My wife wants to buy a place of our own but I am reluctant because I have seen 2 housing bubbles in the last 30 years and prices crashed everywhere both times. I would rather wait and see. If I were to buy my present residence I would spend twice the amount that I spend on rent and will not have to replace the roof and appliances in 3 years. The flippers and RE's have ruined this area and continue to bleed it dry. I hope that they get theirs when this thing explodes. A cousin of my wife dabbles in real estate part time on the side and says that I am making a big mistake. I wonder?
Once again, Peaky demonstrates his total economic ignorance "we haven't had typical inflation for a long time. We've had gigantic asset bubbles, sure, first in stocks and then in homes."
Inflation is a growth in the supply of money. Higher prices and/or wages are symptoms of inflation, not the cause.
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