Thursday, September 07, 2006

Lereah's Latest Admission

David Lereah, chief economist for the National Association of Realtors, after finally admitting that the US housing market is likely headed for a "hard landing", is now admitting that "we’ll probably see prices dip temporarily below year-ago levels". Temporary? How long is temporary? Five years? Ten years? He then goes on to admit that "people who purchased last year with the intent of flipping are likely to get burned" and reminds us of the fact that "over time, home prices rise at the rate of inflation plus one-to-two percentage points" and "buyers in most of the country who plan to stay in their home for a normal period of homeownership can pretty well bank on those historic averages". Normal? How long is normal? 15 years? 30? And what about all those people facing ARM resets who cannot afford to wait out a "normal period" of occupancy?

In other words, anyone who bought a house within the last two or three years in a bubble market is screwed and the longer you wait to sell the lower the sale price will be and if you cannot sell for what you think you are entitled to then you had better get used to living in (or renting, or looking at) your overpriced POS because it is going to take a decade for sale prices to recover to past peak levels.

It is no longer a question of whether house prices will drop; it is now a question of how far they will drop.

Hey, David Lereah --> this is all very old news to those of us who have been paying attention for the last few years and/or who haven't been completely deluded by their paper "profits". Three or four years ago you had a choice of being honest or dishonest; to serve your self-interests or those of the American public. You chose dishonesty. You and your minions have deliberately misled people with your lies and manipulations. You have encouraged this outrageous situation to grow to the most preposterous of levels until it has now reached the breaking point. If you had only spoken truthfully when it mattered, you know, been a professional, then the frenzy to buy a house might have stood a chance at being tempered and the country as a whole would have been much better off for it. There would likely have been much less demand (and necessity) for "toxic" loans and so Joe Average recent house buyer would not be strapped with an unnecessarily crushing debt load. But instead, you (and others) had to shamelessly lie and manipulate and now we have to endure a crash. At this point a crash will probably be in the best long-term interests of the economy but in the short-term we must endure much pain and suffering all of which could have been avoided or at least minimized. Truth is always preferable to dishonesty.

Mr. Lereah: you no longer have any credibility IMO and should be subjected to the modern equivalent of tarring and feathering.


Anonymous Anonymous said...

And the walls of this RE House of Cards come tumbling down !

Sep 7, 2006, 1:47:00 PM  
Anonymous Anonymous said...

people didn't want to hear it.i'm a loan broker and have been frank about my opinion for several years.i have experienced physicsl threats,loud shushings,quiet shushings,derision,sneers,and occasionally "what makes you say that?".a majority of people in the office i work in expect the market to recover next spring,it is a good shop,and for the most part the people are honest,and competent,however there is a huge emotional investment (and financial)for many.

Sep 7, 2006, 4:17:00 PM  
Anonymous Anonymous said...

A lot of "one star" ratings for Lereah's book on The one I like best, and the best, shortest review I think I've ever read for a book:

Reviewer: Rodolfo Zanzibar (Encinitas, CA United States) - See all my reviews
Your Yugo Will Run Forever and How to Set the Land-Speed Record With It.

Next book, going to collaborate with the authors of Dow 36,000 on "How to publicly offer stackable swampland and get rich off "soft" money."

Sep 7, 2006, 4:38:00 PM  
Blogger marine_explorer said...

"...reminds us of the fact that "over time, home prices rise at the rate of inflation plus one-to-two percentage points"

Gee, thanks Lereah for that "scoop", which Dr. Shiller has maintained for years. Your credibility is toast, so it's time for the NAR to step aside. I'm sure someone could do internet-based transactions for 1/10 those Realtor comissions.

Great image, and if I'm not mistaken, was penned during the Stamp Act riots before the Revolution. Realtor fees are now the arbitrary tariff of this age.

Sep 7, 2006, 4:48:00 PM  
Blogger Marinite said...

Great image, and if I'm not mistaken, was penned during the Stamp Act riots before the Revolution

And here I thought I was being subtle.

Sep 7, 2006, 7:09:00 PM  
Anonymous Anonymous said...

HAHAHAHA. I seriously thought that 2nd Lereah book was a spoof til I looked it up on Amazon. That guy kills me. He is the equivalent of Ms. Abbey Cohen at Goldman Sachs in 1999. HA HA

Sep 8, 2006, 9:05:00 AM  
Blogger David said...

David Lereah Watch Blog

Sep 8, 2006, 1:17:00 PM  

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