David Lereah is back with more predictions
Bailout News, The Economy, Real Estate May 8th, 2008
I didn’t believe David Lereah (former chief forecaster for the National Association of Realtors) during the real estate boom and I don’t believe him now. This guy has absolutely no integrity or credibility. He kept telling people to buy real estate up until he quit working for the NAR and now he expects me to believe him when he says he had no idea that banks were giving money to borrowers without even verifying income. Yeah, right!!
Nevertheless, it was interesting to see him back in the news in this Newsweek article:
It’s Going to Get Worse
Economist David Lereah was once the housing market’s biggest cheerleader. Now he says the bust isn’t near over, and home prices still have a long way to fall.
It’s been more than a year since Lereah left NAR, so I called this week to check in. It turns out he has recently set up a new firm called Reecon Advisors, which is advising Wall Street firms and institutional investors about the real estate market. “Wall Street has an intense interest in [this], because they’re looking for when is the recovery going to come, and at what point does the cycle turn,” Lereah told me.
His answer: not yet. “We’re not at the bottom,” he says. “[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better.”
Lereah says that the industry may begin to see a slight uptick in sales later this summer, which could signal the start of the recovery. Home prices, however, will continue to fall. According to the latest numbers from the Case-Shiller index, the average U.S. home has lost around 15 percent of its value since the market’s peak. “We’re probably going to end up with a 20 percent [decline], but if I’m wrong it will be even more than that,” he says.
May 6th, 2008 at 6:08 pm
Interesting to see how Lereah’s views changed after he left NAR. Their new guy thinks happy days are already here. As a Realtor for over 30 years, I just wish they’d tell the truth.
I think that truth is that we’re in uncharted territory, and nobody really knows what’s going to happen. (See “How low will prices go?“)
May 6th, 2008 at 6:49 pm
well RealtorDave,
you must be one of the few honest realtors out there. Good luck to you.
June 12th, 2008 at 7:06 pm
probably the ‘lereah predictor’ has to be called nar predictor soon. seriously, that reminds me of the simpson ‘wasn’t me’ episode. right now it should be apparently that wishful thinking doesn’t solve the problems.