David Lereah- Change of Heart?

May 2007 saw the reasonably-well publicized departure of David Lereah as “Chief Economist” of the National Association of Realtors. To understate the point, Mr. Lereah has been the object of plenty of attention in the housing blog community. Most of the attention was negative, and resulted from the frustration of repeatedly seeing and hearing him quoted in the mainstream media as something of an impartial expert regarding the condition of the housing market. Perhaps not surprisingly, Mr. Lereah tended toward the positive in his interpretation of housing sales data and future predictions, even when signs of weakness began to appear in the market. This must-see graph captures some of his better quotes, and when he offered them.

For those that didn’t explore the first link, Mr. Lereah published a book in early 2005 entitled “Are you missing the Real Estate Boom? Why home values and other real estate investments will climb through the end of the decade- and how you can profit from them.”

In 2006, this book was retitled “Why the Real Estate Boom will not bust- and how you can profit from it. How to build wealth in today’s expanding real eastate market.”

It is therefore interesting and amusing to see Mr. Lereah change the spin on his way out the door, and begin to apply some revisionist history. In this interview with Bob Brinker from early May, he even goes so far as to chastise the “speculators who strayed from fundamentals…and got us in trouble.”

David Lereah Interview


If you want to skip ahead, his comments regarding Southern California arrive just after the 13 minute mark. Here are the highlights:

“L.A., San Diego, they are all out of whack right now. Prices got too high for the median household…there’s going to be a long period here, of recovery. Homesellers have been stubborn, they haven’t been reducing their prices as fast as their Northeast counterparts. Home sales are way down right now, and it will take price decreases- sellers lowering their prices- to bring buyers back to the marketplace. I suspect we’re not going to see any type of recovery there until at least 2008.”

While these decidedly negative comments may not sound particularly surprising to many of us, they are coming from the most prominent market cheerleader of the past several years, bar-none. The ‘soft landing’ holdouts may find this particularly sobering (and they should).

Despite this apparent dose of rationality, David still makes some bizarre remarks that are worth listening for:

  1. If speculators wouldn’t have come in to Vegas…
  2. Commissions are Commissions
  3. The baseball team the could save D.C. real estate
  4. Fingers and toes crossed, X2

Bob didn’t exactly give him a tough interview, but having David on the hook for more than a glib, obfuscated single quote was worth it to me.

It will be interesting to see how David’s heir apparent, Lawrence Yun, does carrying the torch as the market continues to correct, unwind, fall apart, or whatever you want to call it. Donning the skirt and waving the pom poms will require even more gumption in the months ahead.

23 thoughts on “David Lereah- Change of Heart?

  1. lee in irvine

    Let’s talk about credibility and professionalism.

    David Lereah wrote another (much overlooked) book that was called, The Rules for Growing Rich: Making Money in the New Information Economy, advising people to buy bloated technology stocks. It was published in June 2000 just before the collapse of the dot-com bubble.

    The only thing this man did was repackage his carnival barker skills for the next bubble.

  2. SoCalWatcher

    Spinning…..like a record. Do you think he would say the same things while spending $40m of NAR’s money to say the opposite? I have been in sales (not RE) for a long time. Any negativity, whether true or not, is always frowned upon because instead of being realistic, it shows you are giving up. When RE Agents income are 100% commission based, as big commissions at that, you think he would hint at negativity? Plus, when he is the author of a book cheerleading to his own people, it is almost AMWAY-like that NAR members would gobble it up and have something to point to when a client thinks otherwise.

    Bye bye, Lereah. Hope you dumped those spec properties that you are getting hosed on due to drinking your own kool-aid…

  3. socalhousingbubble

    SoCal watcher-

    I agree with your points regarding pressure against sales “negativity.” I guess we all expect an tolerate a certain amount of puffery in these lines of work, but obviously, at some point it becomes so insincere to be intolearble.

    David reached that point a long time ago, and some other comments from final interviews hinted that he might have been scratching and crawling for some shreds of credibility on his way out the door.

    Too much damage was done.


  4. Saw It Coming

    You all must be wrong.

    I just got this email from my “real estate professional” that was asigned to me when I signed up on zip realty. The market MUST be hot because he also told me to call him because he has some “exclusive pocket listings” that are not on the MLS.

    Wow…If I were a seller and found out I was not on the MLS, I would be furious.


    I have some great information to share with you.

    Gary Watts is an experienced and highly respected Real Estate economist and his forecasts are very well known in the Real Estate world.

    I went to Gary’s live presentation and obtained this electronic copy of his renowned forecast.

    He has predicted the varying cycles of the Real Estate market year after year with amazing accuracy and many times predicting the opposite of other economists, but his opinion is very widely acknowledged and religiously followed.

    This is very useful information and I hope you find it useful also.

    Please call me if you have any questions,



    Nicholas R.P. Dean, MBA
    Associate Broker, REALTOR (R)
    ZipRealty, Inc.
    Licensed in California
    Toll Free: 1.800 CALL ZIP x8990
    Cell: 949.721.9990
    Fax: 866.826.0256
    My Profile: http://www.ziprealty.com/agent/ndean

  5. IrvineRenter


    Gary Watts or David Lereah, which has less credibility?

    I like the reference to “religiously followed.” Ritual kool aid drinking is part of the bulls religion. I guess Gary Watts forecast must be a holy book.

  6. socalhousingbubble


    I debated about adding his mugshot to the post…I was trying not to be inflammatory :]



  7. Richie

    Sorry if this is the wrong place, but I have a question about using Zillow.

    I found this property: http://www.zillow.com/HomeDetails.htm?zprop=19887640

    It is listed as For Sale at $575,000.

    In the sale history section it lists a sale price of $562,500 on 6/12/07. Was this house really sold just 3 weeks ago, and is up for sale again?

    Also, the only other sale lists a sale of $9,500 on 1/29/1980. There’s no way this house sold for only $10k in 1980. What does that number mean?

  8. squareround

    Hi, Irvinerenter,

    Be careful of this homeowner. Does he become insane? He increased the price from 1.6 million to 2.1 million resently.

    5512 SIERRA ROJA ROAD, Irvine, CA 92603**
    Price Reduced: 10/17/06 — $1,850,000 to $1,795,000
    Price Reduced: 12/05/06 — $1,795,000 to $1,749,999
    Price Reduced: 03/27/07 — $1,749,999 to $1,685,000
    Price Reduced: 05/10/07 — $1,685,000 to $1,625,000
    Price Increased: 06/27/07 — $1,625,000 to $2,100,000
    Price Reduced: 06/28/07 — $2,100,000 to $1,980,000

  9. Darin

    I just tried to make a with a collection of Lawrence Yun quotes, but it got ‘eaten’. Quick recap,

    Media is responsible for confusing the customer.

    Don’t pay attention to low sales volume, it’s not an important fact.
    Sales volume will pick up.

    Residential prices are maxed out
    Residential prices should pick up again in 2008.

    The name of his quarterly report (I couldn’t make this shit up) “Smooth sailing ahead”

    Out with old, in with the…old

  10. IrvineRenter

    You made the right call. Since I didn’t write it, I can be inflammatory in the comments 😉

  11. No_Such_Reality

    Well well, I wonder if it will show up as “sold” or “in escrow” promptly. If so, I think we know what the deal is…

  12. socalhousingbubble

    Yes. The few items I’ve seen of Lawrence have him spinning at David’s pre-backpedal level.

    What is interesting is that many agents complain that their sellers don’t have realistic expectations and want to list for too much money.

    So is this a Realtor problem because they realize prices are too high but don’t want to admit that to buyers because that would undermine their confidence in purchasing?

    They should realize that instead of trying to talk out of both sides of their mouth, they could get transactions occurring again if they admitted more openly that homes are overpriced and need to come down. Once prices make sense, you won’t have to “sell” any buyers on the concept that it is a good time to buy, because it actually will be!


  13. Patience

    Havent’ you heard that old Steven Wright joke:

    I went to the hardware store and bought some used paint. It came in the shape of a house.

  14. IrvineRenter

    Whenever I see “custom paint” I think, “colors we liked, but you will probably think are ugly.”

  15. Mel

    That’s my reaction as well. Also, I tend to wonder if it means, “we also painted it ourselves,” so the edges and areas around light switches might not look so great up close. Also, good luck matching it perfectly so you can get a small can to touch up walls.

  16. IrvineRenter

    You guys obviously care more about Home Gain than we do. Please don’t spam us.

  17. SoCalWatcher

    Is Home Gain anything like “Rogaine”? If I sprinkle some “Homegaine” on my listing will it make the value grow like a head of hair?

    Bwaahahhahhaaa 😀

  18. patientrenter


    Forgive me for being ignorant, but can you spell out what that deal might be (if it shows up in escrow or sold)? Do you think this price pattern is a sign that they found another person willing to go into default and a lender willing to loan almost $2 million dollars for this property to that other person?

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