November 20, 2006

The corrupt David Lereah says "You'd have to go back to the Great Depression to find a housing period that is this unique"

Oh, Mr. Lereah, you are correct, we will be going back to the Great Depression soon. Thanks to your swindling and cheerleading.

Here's the Newsweek report on the NAR confab. Must have felt like COMDEX in 2001...

Realtors are a professionally upbeat group, and their trade association is sometimes criticized for parsing data to present a too-positive spin. Sure enough, even amid lots of down arrows, chief economist David Lereah found reasons for optimism.

Despite all the talk about a nationwide boom, Lereah says only 26 percent of U.S. home markets got really overheated, with speculators driving prices up by more than 20 percent annually.

"The biggest question I'm faced with is how far do prices have to drop and how long will it take for the correction to finally turn around in [those] markets. I don't have an answer," Lereah says, conceding that those markets could stay soft into 2008.

But he counters that falling prices, while unpleasant for homeowners, are really a good thing, because lower prices will spur more buyers to make offers, and the resulting sales will help not only commission-hungry agents, but also the furniture makers, appliance companies and other ancillaries that make housing such a vital prop to the economy. And while he calls predictions that home prices might fall 30 or 40 percent "nonsensical," he can't offer a number of his own.

Says Lereah: "You'd have to go back to the Great Depression to find a housing period that is this unique."


pork chop express said...

The problem is that probably 90% of the sales and appreciation are in those 26 housing markets.

kilobar said...

Only 26 housing markets? Gee, most of the major cities in the US is "only" 26 housing markets.

Odd that he can't come up with a depreciation number on his own, considering he is a PhD and allegedly the top real estate economist. What a douche.

blogger said...

oh, he can come up with a number. he knows the number. but if he said it, 1) he'd lose his job and 2) America would be freightened. Really frigging freightened.

kilobar said...

My thoughts exactly. Like a CEO of a company that is sinking. He has to keep showing that happy face for his investors.

Stuck In So Pa said...

Now it’s going to go soft into 08, what happened to "pick back up in the spring of 07 ?”

What happened to "The worst is behind us" Oh wait, that was Greenscam.

A good bull sh#tter never lets himself get backed into a corner with specifics. These guys are supposed to be the b.s. experts. Have they forgotten their own rule: Sound like you very intelligently know what you are talking about, AND keep your specifics/timetable vague as hell! (Or even better, don't bring up any at all.) Never, ever, allow yourself to be nailed down on any statement.

Maybe its just their desperation?

Greeny wants his legacy

David L wants his job!

Neither looks too secure these days.

"That's the trouble about the future. Its so hard to predict."

tinpusher said...

Now I'm really scard. David The Liar is talking about The Last Great Depression and the Current Housing Market in the same sentence.

UN Funkin Beleivable

hcooper said...

Either this group is a bunch of wanna flippers that lost money on speculative investing and were ultimately turned down by A&E to star on the show because of a lack of personality or you guys have the mindset that others control your destiny through chit-chat.

What does it matter what Lereah predicts. Don't get so fired up over the fact that many of you spent way too much for your last property and now you are going to have to sell at a loss and move back in with your folks.

NAR could say that the market is going to hell in a handbasket and consumers will still pay top dollar for a dump in the middle of nowhere. Or they will wise up and pay reasonable prices just like they did when the market was so-called normal. Consumers will also set prices regardless of what NAR or anyone else says.

michael said...

OT - but does anyone know what is up with the forsakencraft site?

blogger said...

When Lereah said "26% of US Home Markets" was he talking by land mass?

Sales of existing homes fell in 38 states during the summer, led by steep declines in Nevada, Arizona, Florida and California, as the once-booming housing market showed further signs of a steep slowdown.

The National Association of Realtors reported that sales dipped to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago.

The declines were the largest in once-booming areas of the country. Sales fell by 38 percent in Nevada, 36 percent in Arizona; 34.2 percent in Florida and 28.6 percent in California.

In all, nine states had sales declines in the summer of 20 percent or more compared to the third quarter of 2005.

The weakness in sales also affected prices with 45 metropolitan areas experiencing price declines, according to a separate survey the Realtors did of 148 metropolitan areas.

Metroplexual said...

So if you would have to go back to the Great Depression does that mean that is where we are headed? What a dope, he showed his hand on this one. He knows the economy is about to go down the crapper. What he does not know is he will be in the history and economics textbooks books as what was part of the problem leading up to the disaster.

FlyingMonkeyWarrior said...

The biggest bubble of all - derivatives Trading Soars to $370 Trillion – it will be the root cause for global depression
Alan Hershey
Nov. 17, 2006

hemorrhoidforhousing said...

To Mr. Lereah: It's the prices stupid!

borks my bitch said...

Phoenix is the poster child city to show the example of this coming depression. Both you and I flipped houses in Phoenix, and count our hail mary's for getting out of there. Would it not be great to buy these houses back 20% cheaper than we actually bought them for. Not the price we sold them for, but the price we bought them for.

Medical Student said...

It's "nonsensical" to have 30-40% declines my ass.

I can rent a house instead of buying (from a buyer with NO mortgage payment, mind you).

I will save more each month versus buying than the would-be seller turned landlord will earn in net profit from my monthly rent.

This doesn't even take into account the fact that this would-be seller would actually make MUCH more money by cutting his asking price in half and selling and then investing that money somewhere other than real estate.

These are strange times...

borks my bitch said...

I agree with you,but most sellers are to stubborn to see the trail of flames behind their butt.

AnalysisGuy said...

Take a look at my market history & forecast report for Bakersfield, Modesto, Los Angeles and the US Reports that will published in a few days include Boston, San Diego, Las Vegas and Miami.

blogger said...

It's not the prices - it's the Price to Earnings Ratio.

Always is.

foxwoodlief said...

I don't know.

Talked to some of my new neighbors here in Austin and all see flush with cash. Most are transplants from California and a few, like me from Phoenix. Of course the Californians are the lucky ones. The kid down the street sold his small house in SD he bought in 1999 and put 75% down on his 3800 sq ft house and works for himself, a software designer, and he is typical of the people who bought in my neighborhood. Same in Phoenix, mos the Californian transplants I knew paid cash for their houses and still had money left over.

You like to blam David Lereah but the real blame belongs to Californians. They are the ones who created the mother of all bubbles with their greed and fraud and then cashing out of their bloated bubble to run to Portland, Phoenix, Vegas, Seattle, Austin with their cash and drive up the prices for the average working class.

You can also blame them for higher taxes. In a lot of states where 2.5-3% was the norm for property taxes and houses where no more than $100-150,000 at the high end, the homes and taxes were affordable for most middle class folks. In comes the Californians and drove up prices with their fake inflated dollars and exported their inflation to the rest of us and not only drove up property prices but the taxes as well.

David Lereah has no power to affect the housing market one way or the other. It is the consumer, the lenders, and of course Californias who most affect the market. And as they say, if those Californians can't buy a 800 sqft ghetto house for $400,000 and sell it for $800,000 two years later they can't come to Phoenix or Austin or Seattle and pump up those markets with their inflated profits.

I think the death of the California housing market is the best thing that can happen to this country. Californians need to be knocked down a few levels to "reality" and recognize that their dumps are not worth $500-1,000,000 for a house that is 40 years old, a dump, in a slum and no way cmparable to the houses that money should buy anywhere in this country or the world.

Anonymous said...

This all reminds me of the movie I saw over the weekend, "Thank you for Smoking". David Lereah and the main character share a lot in common.

Shakster said...

Yeah IT's them thur Claifurnyuns,yep.

Anonymous said...

Hey Foxwood,
Welcome to TX. Stop bitching you bought a huge house for peanuts, pay no state income tax, and live large off your Phoenix house sale. You always have to pay the piper his due, so grow a pair and ante up, and stop bichin like a little wussy.

foxwoodlief said...

Just a reminder of the Economist magazine article in June 2005 that showed the world wide house bubble the largest in history. Also a reminder of how we fair against other countries since Keith is now in Europe and can actually see first hand what I and others have said over the past year that we are not alone or the worst.

Here is that list of home appreciation from 1997-2005, from highest to lowest,

South Africa up 244%, Ireland up 192%, Britain upp 154%, Spain up 145%, Australia up 114%, France up 87%, Swedon up 84%, Holland up 76%, the USA up 73%.

The article said something to the effect that the increased value of these markets was greater than the GDP of those countries. Bubble? I'd worry if I were in the top five listed above and fearful if I were in the other groups. If we collapse, who will fair the best in a depression? Opinions?

hemorrhoidforhousing said...

I don't see a depression on the horizion unless there is a disaster of epic proportions which would bring on a collapse of the US monetary system. I do think there will be a significant recession either before or after the next presidential election though.

But I fear saying things like this on this blog because it only provokes the kooks to come out of the woodwork with their rantings and the long article postings they find on websites like

Paul E. Math said...

The thing I can't stand about Lereah is that he states opinion as fact. And his opinions are nowhere near objective. And he has the backing of the NAR.

So when you tell people you think there is a housing bubble they say "That's not true, the chief economist of the NAR says that only 26 housing markets are overvalued".

Lereah has a phd in economics and the opinions that he states as fact will carry more weight than the real facts which disprove his opinions. Most people don't have the time, inclination or ability to make an independent assessment of the facts.

So that's why I hate Lereah. He may not have been the sole cause of this housing bubble. But he took advantage of the limitations of human intellect and was one of the many sources of hot air inflating this housing bubble. He abused his position to line the pockets of his NAR members.

For this he should be shot, pissed on and buried upside down.

Paige Turner said...

"The biggest question I'm faced with is how far do prices have to drop and how long will it take for the correction to finally turn around in [those] markets. I don't have an answer," Lereah says, conceding that those markets could stay soft into 2008.

Dr. David Lereah, chief economist for the National Ass. of Realtors, has impressive CREDENTIALS: B.A. in Economics & Marketing from American University, Washington, D.C. and a Ph.D. in Economics from the University of Virginia, Charlottesville, Virginia. He is the author of two real estate books and he has also had extensive experience in the banking and investment industries.

As the unsustainable real estate bubble was inflating, Dr. Lereah imaginatively prophesied that the bubble would never bust. Now that the real estate bubble has busted, Dr. Lereah has run out of answers -- asinine and otherwise.

Has the original Kool Aid Kid finally run out of answers? I certainly hope not, because Dr. Lereah has so much for which to answer.

foxwoodlief said...

anonymous said...
Hey Foxwood,
Welcome to TX. Stop bitching you bought a huge house for peanuts, pay no state income tax, and live large off your Phoenix house sale. You always have to pay the piper his due, so grow a pair and ante up, and stop bichin like a little wussy.

My bitching here isn't for myself but for all the people I'm meeting here in Texas who are awaking to the fact that it doesn't matter that the average house in Texas is cheaper to buy than other states because their taxes make up the difference.

I've meet a lot of older Texans who are just retired who are selling because they recognize they can't afford the house they bought in 1972 on their retirement incomes. Even the new kid down the street who put 75% down on his 3800 sq ft house tells me his taxes make up 66% of his payment.

The point is that people can't afford to pay $650 a month just in property taxes then add mortgage, insurance, utilities, food, car payments (if they have them) raise kids, pay debt etc.

I just am amazed that so many Americans just sit back and let the system "%$#" them. It is one thing to loose your house if you over extend yourself with debt, buying more than you can afford etc but to watch the poor, the elderly, loose their homes because they can't afford taxes is immoral.

Before I moved to Austin I recognized that the tax inequality was an issue for me and many Texans and I sent a letter to the Austin Statesman and it was printed, to which I got a lot of "go back to Arizona" comments via email until people realized what I was saying. To many Texans the "we don't pay a state income tax" is the greatest joke! Most don't realize they pay one in their property tax and that it has no relationship to their incomes and is regressive.

I am a ficial conservataive and a social liberal. I'd rather pay an income tax that is fair and not regressive than tax property. I don't consider it a bitch but a political issue.

Anonymous said...

All you fat cats feel so good predicting a great depression when housing tanks, but you'll get yours too. Where are you going to run when the riots start?

Paige Turner said...

Anonymous said...
All you fat cats feel so good predicting a great depression when housing tanks, but you'll get yours too. Where are you going to run when the riots start?

This is the ultimate problem. Once the global economy tanks, there will be no safe haven for anyone. Gold and silver certificates, government entitlements, property deeds, bank deposits and human rights will all be meaningless.

Soon, there will be extremely limited resources available for allocation in an impoverished world. When the economy is good, there are plenty of resources which can be used to support non productive members of society. However, when the going gets rough, hard choices will be made.

This is not idle speculation. History has already shown what can happen when nations facing collapse forcibly take the resources of their neighbors.

Anonymous said...

I hope we get the party started real soon veronica. I don't think I can bear watching this once great nation degenerate any further. Just make sure you have plenty of guns and ammo and be ready to do your fair share of work.