I don't advocate violence in any way against realtors, but David Lereah may need a good egging or pie-in-the-face at his next public speech. Anyone want to find out where he's speaking and sign up?
An HP'er posted this subscription WSJ article on Bubbletalk - go there to read the full article. Here's the lowlights:
Realtors Official Forecasts Declines in Home Prices
The chief economist of the National Association of Realtors predicts that U.S. home prices will generally decline during the next few months.
The unusually bleak assessment from David Lereah, the trade group's top economist, came as the Realtors reported that their index of pending home sales dropped 7% in July.
The decline shows that home shoppers continue to take their time, hoping prices will fall amid a glut of houses on the market in many parts of the country.
"I'm hoping for prices to drop," Mr. Lereah said in an interview.
The Realtors normally stress the tendency of home prices to rise over the long term. But Mr. Lereah said lower prices are needed in some parts of the U.S. to lure buyers back into the market.
Sales have stalled partly because "the sellers are not bringing prices down fast enough," Mr. Lereah said. "They've been very stubborn."
A drop of 5% to 10% in California and southern Florida "probably would be enough to bring sales back," he said.
September 04, 2006
David Lereah of "Are you missing the real estate boom" now saying "I'm hoping for prices to drop". Seriously. No, seriously.
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29 comments:
5% to 10% in California? Gee, then houses might drop from a 10:1 P/E ratio to 9:1.
Try more like 5% to 10% PER YEAR for the next 3-4 years. A good 30% haircut might even start to get things back close to sustainable.
CASH IS KING!!
Lereah was calling for reasonable growth this year about 4 to 6 months ago. This dumas will prop up the market all the way down.I wonder how he will fix his reputation. If he can't, maybe that Cramer guy can have his job.Mad Mortgage with Jim Cramer, boo ya.
NIZE NOTES:
Word Is Getting Out on the Real Estate Collapse
Things are going to get interesting very soon. It seems as though word is getting out on the problems in the housing market. When the word is fully out, sales will go from being slow to being dead. No one will be buying, hell, no one will even be looking. Anyone who will need to get out of some real estate, or is forced out, will only be able do so at huge discount prices.
How far has the word traveled on the weakening housing market? Here's a reporter in Los Angeles writing about the real estate market. And she is getting unsolicited advice to wait because the market is about to collapse.
Lisa Napoli reports for the LA Downtown News:
It's impolite to talk about money, but let's just say, for purposes of making my point for this story, that right now I have a big chunk of change in the bank. After months of waiting, the sale of my beloved New York City apartment, where I lived for two-and-a-half years before moving to Downtown [Los Angeles] in 2004, finally went through.
Now the task of finding a permanent home in or around Downtown...- as permanent as anything is these days, of course - can officially begin...
That fateful day after closing, I marched to the bank in Downtown L.A. and deposited a whopper of a check that would make up for the pain of six months of deficit spending. The teller looked at me curiously - I don't look like someone who would have more than a hundred bucks on them at any given time...
...all of a sudden everyone became a real estate advisor. Including the bank teller! "Don't buy just yet, honey, the market's gonna tank," she said, wisely, as I explained the reason for my sudden windfall...
Finally, at a party given at the home of a friend of mine who bought in Echo Park before prices got really outrageous, I met someone whose advice I bought into. "Wait till all those people with Mickey Mouse loans start to foreclose," he said. "Give it six months. Just watch."
Of Course, this crash is going to last a lot longer than six months, but the word is starting to get out--and that means we are very near stage two of the collapse where slowing sales turn into declining prices.
Stage one of the crisis is caused completely by the Federal Reserve raising interest rates and, thus, cutting down on the amount of new money created. Stage two of the crisis starts when many people begin to be aware of problems in the real estate market. This causes sentiment about trends in the market to change from positive to negative. Thus stage two combines the stage one factor of the Fed choking the real estate market, with the added negative of opinion about real estate changing. Stage three will occur when the factors in stage one and two are combined with mass foreclosures, forced sales and homeowners walking away from their properties-if they can.
I think he might be right. A good 10% drop would increase demand some in those areas. Oh, and no, I am not a realtor. I trade commodities.
5-10% ?? You kiddn'! Try 20% to start, up to at least 50% in many areas!
I love the sales ads"Price Reduced"
From 1mil to $995K BFD!
I hope prices don't drop then. That way we have ZERO transactions and all the commissioned REIC crackers make NOTHING!
crispy&cole
5 to 10% for mid century POS???
LOL
Try 50 to 80%. Sorry, it may be YOUR HOUSE, but it's MY MONEY!!!!
Florida disaster area:
Looking at the development that was planned along this 1 golf course I play at, I would say it's not coming back for a LONG TIME. They had the roads in, the retention ponds carved out but not sodded. Well, the rains have washed away the retention pond walls. craters everywhere, weeds now are 10 feet tall. Asked the other guy? (sarcastically). "hey, what are these guys waiting for, let's get those houses built." He laughed and said 'housing crash'.
BRAHAHAHAHHAHHAHA!!!
No buyers whatsoever so the sucky home builder now has nothin'.
If Lereah is publicly saying the market won't come back until there's a 5% to 10% drop, how bad do you think he really believes it's going to be? Look out below!
we're already 10%+ off with the incentives, probably heading to 50% off
it's clear you cant believe anything DL says. i think a lot of us had it wrong when we assumed his thought process was that prices only go up.
in the end, it comes down to, who does he work for. the NAR. what does the NAR want? people to be buying and selling so they can get their well-deserved commissions. how do you get people to buy and sell? tell them "buy now or be priced out", "running out of land", etc.
this brings in buyers like crazy, and it raised prices probably more than what the NAR wanted.
so right now, as he has complained, 'sellers are being stubborn' and not lowering their prices and being unrealistic (aka, "we need more than one transaction/yr for our 5mil agents!").
so that didnt work too well, so now it is gonna be "prices will drop 5-10% over the next couple months" aka, dude drop your prices we need more transactions!(keep in mind he'll be saying this for 3 years, probably more since he'll say it past the bottom).
so yes, of course he is 'hoping' for prices to drop, he doesnt care about home prices just like a realtor doesnt care if a house sells for 10k more, they just want the deal done and get their check for 15k instead of 15.5k
all about ethics folks, move along
if he said what i am sure he is aware of, that prices will fall 50%+ from peaks that would create mass selling and lowering prices right away. all he wants is a slow drawn out selling period so his peons below him get their commission checks until discount brokers take over
REGARDING: NAR head cheerleader David Lereah now saying, "I'm hoping for prices to drop".
Yeah, yeah. We've heard the village idiot go from: "get in while you still can" , to "there is no bubble", to "there will probably be only single-digit increases", to "there will be a soft landing", to his latest claptrap, "I'm hoping for prices to drop." Well, his wish has come true.
So how does this immensely-beneficial Lereah "correction" work? Apparently, this week, he feels lower prices will allow some of those previously priced out of the housing market to jump on the sinking ship. Of course this means that some sellers will lose all of their equity and maybe more. And the buyers will have negative equity within a couple of months, after which, some of them will sell at a loss. And so on and so on.
I can't wait for next week's Lereah pronouncement.
Keith,
Why don't you circulate a petition to demand for Lereah's resignation. By doing this, we are helping the ones who may not be aware of their spin and prevent them from further rip off.
Let's do a hypothetical example. Supposing you're the lender with millions worth of optionARM. What steps would you have to do in handling massive pre-foreclosures/foreclosures. Would you want to hold on to those foreclosed properties as REO properties?
Show your managerial savy.
Plain and Simple 'CYA"
F---! 5 to 10% in Calif! Is he for real? That is very out of touch with reality! A 45 to 90k reduction on a 900k POS! B F D
A home valued at 750k in 2000, today 1.5mil. With the wild run-up of late a 30 to 40% reduction doesn't seem to far fetched does it?
You gotta sell and can't?
Lower your price!
You may be sellin, but that don't mean I have to pay your price!
I love a buyers market!
That's Great Dave!
A 10% reduction in Ca. and Fl. would bring things back to a 40% inflated price!
Get Real!
Proof positive that realtors are 50% full of S--T, and 51% Crap if this guy is the head of the NAR!
Capt. David Lereah at the helm of the Titanic, "5 to 10% loss of life is acceptable!" Considering the ship was overbooked!
This was the Best the N.A.R. could do!
I learned long ago that a problem identified and announced honestly early on is much more tolerable and much easier to deal with!!!!
30 to 40% reduction doesn't seem to far fetched does it?
40 to 50 percent of the run up, not the entire price, would be realistic, imo.
2004 prices, add run up, subtract 40%, there is your offer.
Down payment or no, you’r still underwater unless you figured these numbers into your RE Purchase and engaged a RE Agent for 1%.
Big down payment, hard loss, not paper loss.
30 year fixed would not even help in this regard.
As a real estate broker (commercial only, not a Realtor) I can tell you that the worst thing for a Realtor is a stagnate market. He's hoping for a dropping market because it will move properties. Commissions, commissions, commissions!
Home Prices Show Sharp Slowdown in 2Q
Tuesday September 5, 11:13 am ET
Home Prices Across the Country Show Sharp Slowdown in 2nd Quarter, Report Shows
WASHINGTON (AP) -- U.S. home prices continued to rise in the second quarter but showed the biggest slowdown in three decades, federal regulators reported Tuesday.
The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage-finance companies Fannie Mae and Freddie Mac, provided the latest indication that the housing market is cooling substantially.
Average home prices rose 1.17 percent in the April-June period, compared with 3.65 percent in the second quarter of 2005 -- the biggest decline in price growth since OFHEO started keeping track of home prices in 1975, the new report showed.
The agency cited higher interest rates and rising inventories of homes for sale as possible factors in the slowdown in price growth.
BASH ALL YOU WANTED TO!
SADLY, NO BODY GIVES A FUCH OF YOUR "END-OF-WORLD" PREDICTIONS! SALES HAVE SLOW BUT PRICES ARE NOT DROPPING LIKE YOU ALL FANATICS HAVE CLAIMED!
GO GET A JOB, YOU ALL MINIMUM WAGE EARNERS! GEORGE BUSH IS STILL KING!
I know little about investing, but isnt a drop of 10% followed by a buying bump called a dead cat bounce? A perceived buying opportunity is here, if housing was a stock I would be getting ready to buy puts.
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