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[audio:https://www.irvinehousingblog.com/wp-content/uploads/2007/06/DavidLereah.mp3]
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:
- If speculators wouldn’t have come in to Vegas…
- Commissions are Commissions
- The baseball team the could save D.C. real estate
- 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.