March 27, 2007

The Corrupt David Lereah throws new home builders under the bus, starts taking real crazy now


It's all coming apart now for TCDL. Now he's not even making sense.

Man, it's time for a new spin/strategy session over at the ol' NAR, because today's line of BS isn't even making sense. To say existing homedebtors trying to sell will be fine, and new home builders will struggle, is the exact opposite of reality. Everyone (except TCDL) knows the homebuilders will ALWAYS win a selling battle versus the suckers they sold homes to (existing homedebtors) who can't cut prices like the builders can.

Hmmm.... why do "Mugabe" and "Lereah" seem so similar today? Could we see a violent overthrow soon? The 1.3 ramen-eating natives are probably getting a bit restless right about now, don't 'cha think?

David Lereah, the head economist for the National Association of Realtors, said the landscape for the resale market is very different from new-home sales.

There is a recovery in existing home sales, but for new home builders, the market will be very bumpy going forward,” he said. “New-home sales are still in recession, and increased foreclosures and subprime problems will make the next two years difficult.”

35 comments:

tmaioli said...

NEXT TWO YEARS? I thought we had already reached bottom like 5 times already.

dave s. said...

You seem to be continually puzzled about Lereah as an economist. I think he is a Buchananite: he has studied, and fully understands, Buchanan's Nobel-winning work which describes the self-dealing incentives on public officials.
In this case, the self-dealing is for real estate brokers, who make their 6 per cent if there are sales, and don't if there aren't. Naturally, he tries to keep sales going - real estate brokers are the folks for whom he is working. The economics are textbook.

Anonymous said...

Aren't new home sales the leading indicator/harbinger (canary in the mine) for the health & direction of the greater residential RE market? I am vexed by TCDL's statements as its contrary to the leading indicator that new home sales serve as.

traineeinvestor said...

He talks about a recovery in sales (not prices). I can only assume he means that sales will pick up when prices reach more realistic levels?

Cow_tipping said...

Easy to explain that one.
He owns like 5 flip condos and like a 900K at the peak house and he's not a builder.
I can buy a full brick house for what my neighbors paid for their full vinyl deal few months ago. Builders will clobber the existing sellers no matter what.
Cool.
Cow_tipping.

Mort said...

Trying to analyze the elocutions of David Liarhea is as useful as trying to read the entrails of an animal. The bowels of the dead housing bull offer no solid evidence of a quick recovery. See how easy that was? Bwahaha!

Anonymous said...

tiny grain of truth in lereah's statement. since new homes are, on average, higher priced, their sales will get hit harder by the troubles in the sub-prime market.

az_mtb said...

Lennar's quarterly results plunge

http://tinyurl.com/2b5tvm

==============================

Mass layoffs, here we come!

tmaioli said...

Homebuilder Lennar said Tuesday its profit plummeted 73 percent in the latest quarter amid ongoing weakness in the housing market and turmoil in the subprime mortgage sector.

Corey said...

New consumer confidence numbers point to early signs of a housing-led recession: http://infohype.blogspot.com

Anonymous said...

NEXT TWO YEARS? I thought we had already reached bottom like 5 times already.

- - - - - - - - - - - - - -

It could be worse. D.L. could be a cardiologist watching your heartbeat on a monitor. "He's dead, no wait, he's coming back, oh no he's dying, he's dead, no wait he's coming back, etc...

brokersleaveyoubroke said...

I guess we'll know when we really hit bottom when it gets so bad that TCDL has to tell the truth.

JAFO said...

Yeah, Lennar also said that they are not going to issue any more financial guidance estimates for the rest of the year. There's a solution for you. Just stop reporting and pretend it will all go away. Who in their right mind would buy or hold Lennar stock right now.

JAFO

Scorekeeper said...

*NEXT TWO YEARS? I thought we had already reached bottom like 5 times already*

I know of just these four:

May 25, 06: "This may be the bottom. It appears May is a little better." (Real Estate Journal)

September 25, 06: "We've been anticipating a price correction and now it's here. The price drop has stopped the bleeding for housing sales. We think the housing market has now hit bottom." (Bloomberg)

Dec 29, 06: "It appears we've hit bottom, the price drops are necessary to stir sales. It is working." (Globe and Mail )

"Sales have hovered for the last four months, scratching bottom and then coming up, scratching bottom and coming up again. We are comfortable this is now the bottom"

Any I missed?

Anonymous said...

David, it really is not that hard...

The numbers were "good" a few days ago for existing home sales, but yesterday, were bad for new home sales- so, naturally, being the shill that he is, he only used with the numbers that support his and the NARs position- that housing is a good deal.

Did you actually expect anything different?

Davey Lie-rah said...

Even Jim Jones drank his own Kool-Aid

Anonymous said...

Basically TCDL is just like Bill Murray in Groundhog day only in reverse. Instead of the day and all its events being the same, its TCDL who just says the same thing everyday hoping that one day reality will mesh with what he is saying. So please expect this from him for the next decade unless he is either fired or passes away.

Anonymous said...

with lumber prices falling to about half of what they were at their peaks in 05, copper falling, labor markets weakening, builders will still be able to sell a new house at $75/sq foot (plus the newly written down price of land) and make a profit.

foxwoodlief said...

Annonymous, I agree that the cost to build is falling and you do see here in Phoenix way out in the fringes (Maricopa etc) offering cracker boxes for $82 a sq ft. The homes are so poorly built they only good use for them is for fire training.

Still, the market is finally showing signs of strain here in Phoenix. I've noticed a big shift in two months. Finally more people dropping prices and I see more short sales. Over-all thought, the market hasn't collapsed and homes are still selling.

The market is schizoid here. I rent in the Willow downtown and people are still dropping $400,000 and up for a 1940s ranch house that is only 1200 sq ft and in need of some updates. I was shocked to see that 1/4 of the listing that were here when I moved back in Febuary have sold. I didn't expect any to sell, and they sold for almost the full asking price. Then the other side of the coin, one house in the WIllo has been dropped $125,000 and hasn't sold and now the owner is refinancing (and extracting paper value) and will rent it out for a loss.

I can't figure it out. I see people at work still talking about buying and looking now. Three people are going out to buy new homes and one is looking for an older home in Tempe. None of them see to think the prices are too high (are they nuts?).

People still are moving here. I've gotten a lot of applications at my job from out of staters wanting to relocate to Phoenix so the city is growing and most of the people coming in still find the homes less expensive than where they are moving from so I think they are the ones buying these over priced homes I wouldn't touch.

WIth inflation up to 5% or more the Fed is engineering a price reduction via inflation so I don't know if we'll actually see these ridiculous prices fall 30-40%. After three years of thinking the end was near I'm still not sure what will happen.

I guess that saying that "Economists predicted ten of the last three recessions." Is true, we really don't know and it is a toss of the coin...and someone will call it right.

Anonymous said...

http://tinyurl.com/27fqnr

From redfin. MLS # S479901

It states 8 days on the market.

Current asking price: $918K

Flipper gone bad. Check out the price the person put the home up for on 5/3/05.

06/09/2005 $678,000
06/08/2005 $739,000
06/07/2005 $712,000
06/02/2005 $617,500
05/26/2005 $739,500
05/24/2005 $736,000
05/20/2005 $650,500
05/12/2005 $721,500
05/10/2005 $650,000
05/06/2005 $685,500
05/03/2005 $1,247,000
04/29/2005 $1,243,000
04/28/2005 $659,000
04/26/2005 $694,000
04/25/2005 $730,000
04/22/2005 $764,000
03/18/2005 $763,000

1708 sq ft.

Hoped for a 64% gain in 2 months.

OC, CA. We celebrate the birthday of an imaginary rodent. Are we not special? Does our shit not stink?

Hot diggity dog.

Mark in San Diego said...

NAR against new home builders. . .love it - the dogs are eating the dogs. . .

on another matter - when you read that foreclosures were down 7% Feb from January, remember that Feb. has 10% fewer days. . .but Year over Year they were up BIG time. . the local rag her in SD - went with the headline - "Foreclosures Down in Feb." . . .that is like saying May was warmer than April this year!!!!!

Anonymous said...

The enormous inflation in home prices between 2002 and 2005, is to blame for the housing crash. It was the price, stupid!

The fuel for the astronomical home price inflation was the easy credit. As prices got higher, Toxic loans were invented, to compensate for the higher prices, while credit was still easy, and drove prices even higher.

In the end, easy credit and exotic loans could not justify the inflated home prices, no matter what the interest rate or loan type. In the end, it was the price, stupid.

Why does the MSM avoid like the plague, talking about the inflated prices of homes, which is the root cause of the housing crash?

How about an extended discussion on the blogs about the actual high home prices, which triggered this crash? If the blog discussions focus on price, the MSM will eventually pick it up.

New thread; It was the price, Stupid.

Anonymous said...

Screw friggen realtors, when i buy at a much lower price with a real loan down payment and affordable I will NOT use a realtor.

SCREW REALTORS!

Anonymous said...

"Wait! Wait a minute! Stop it! I can't understand you! You're all screaming at me at the same time!... The pain and suffering!"

Anonymous said...

holy crap !!!

look at beazer homes after hours down 9%


fbi to seize

class action in NC


tip of the berg

eternitus said...

Don't look at that Gorilla over there, look at my false NAR numbers over here! Baghdad Bob is back at it again!

Someone should ask Chief Cheerleader David Lereah about moral suasion(an Econ term for jawboning)... Basically, what he's trying to do is talk the markets up... He knows that if he admits weakness now, the floor will fall out and any shred of confidence in the housing market will evaporate... Really, it's causing him massive damage by eroding his credibility... I hope he has a good employment agreement with the NAR.

Unfortunately for him, I'm sure history will look on him as we now see Baghdad Bob.

("The Americans are not in Iraq!" Al-Sahaf(Baghdad Bob) Proclaimed. At that time, American tanks were patrolling the streets only a few hundred meters from the location where the press conference was held... April 7, 2003).

Anonymous said...

Bye Bye Beazer Homes:

http://tinyurl.com/2unmqt

Anonymous said...

come on guiys lets get a list of great what stocks to short!!!

I like HOG - no mo equity, no mo harleys

Bourbon Straight said...

How racist, comparing the Lereah scum to the Precious Negroe. The WMD1964 will have yo head.
dcydell@yahoo.com, no fear.

Anonymous said...

Who da spook?

Anonymous said...

What's the difference between the housing market and the Titanic?

The Titanic eventually found a bottom.

bozonian said...

Translating NAR Economist Code:

When you hear this: "Better than expected"

It means this: "We can't believe how many stupid people will buy houses no matter what the price!"

When you hear this: "The Market is returning to normal"

It means this: "Oh shit! Lenders are no longer stupid enough to throw away millions on guaranteed foreclosure borrowers."

When you hear this: "The Market is stabilizing"

It means this: "We need to get more suckers into the market before it tanks."

When you hear this: "We expect the Market to bottom next month"

It means this: "Keep buying. Keep everything looking normal to give me time to move my assets offshore and prepare my getaway to Belize".

When you hear this: "Don't expect the same good results next month".

It means this (Spoken with good Arnold Schwartzenegger voice): "Get Down!!! There's a bomb in dere! Take my hand! Run! Run!"

Todd said...

How long till Lereah fellates a 12 Gauge?

Anonymous said...

Bazball been berry berry gud to me!

Danilo Bogdanovic said...

As an agent in Northern VA, I find that extremely amusing and completely incorrect.

The first sign that the market was turning in Northern VA was that the home builders started cutting their prices and/or offering less incentives. When they did that, the resale market had to adjust and down we went.

After all...who would pay the same if not more for an existing home when they could buy a new home. Exactly...the builders helped bring the market down (at least in this area).

Builders are the ones that have a cost of $100K to $200K on every home they build that they sell for $400K to $800K. They can take a 20 percent hit and still make money while the average "Joe" can't afford to do that.

Seriously...Lereah's got issues and is making up stuff as he goes along.