David 'soft landing' Lereah's condo investments located in the Wasgington, DC metro area are also starting to depreciate in value at an even faster clip. [Zillow still has a some inaccuracies, but this valuation looks right]
Wednesday, May 31, 2006
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waaaaaaaaaay inflated...bring it down to 400k. What a leraeah-joke.
ReplyDeleteAt least he owns investment condos. Maybe he really does believe his own hype? He actually drinks the kool aid.
ReplyDeleteI agree with homeimprovementninja. If Lereah actually believes his hype, and puts his money where his mouth is, then he is just wrong. I would be more disgusted if he were not rushing out and investing.
ReplyDeleteThe problem with Lereah has never been his opinions; it has been that he gets quoted in every news article as some kind of unbiased expert, when he is anything but.
A Redskins fan
Just about everyone in the industry is saying the same thing. The people employed in real estate who will admit there is a problem will only do so anonymously.
ReplyDeleteTalked to a paving contractor over the weekend. Builders are "erasing" projects left and right. Slow times ahead.
ReplyDeleteIt is amazing how many realtors are quoted as saying that the slowdown is "good for the market." It would have been good for the market 2.5 years ago. Now, it is just the first wave of the bad news.
ReplyDeleteDenial is easier on the psyche than admitting the truth....People in RE are still in denial about the market crash...Just heard a bit of gossip that this RE agent at my office is buying a one-bed condo in DC, at the asking price. Hehehe....I guess they think they can flip for a profit, or rent...Profit? Hmmm...they'd be lucky to get $4,000 before taxes. Rent? Along with everyone else who's renting right now and the many others who will try to rent in the near future???
ReplyDeleteHow does anyone know that that chart is actually for Lereah's house?
ReplyDeleteThe research was done. I don't think it is right to give out Mr. Lereah's personal address.
ReplyDeleteIt looks like the zillow chart on my house. Maybe he's a neigbor.
ReplyDeleteI was disappointed to see that zillow has very poor coverage for Washington, D.C., especially since the coverage is pretty good in northern VA and MD. Is that because DC doesn't keep very good records?
ReplyDelete"especially since the coverage is pretty good in northern VA and MD. Is that because DC doesn't keep very good records?"
ReplyDeleteGo to www.dc.gov They now keep very good records, and Joe Public can search through them.
bryce
Just have to post because of the conversation I overheard at lunch today.
ReplyDeleteRealtor (practically yelling): I am sure you can afford it - what you need to concentrate on is getting the lowest monthly payment possible. Your best bet is an interest only with a balloon payment after 4 - 5 years. You won't have to worry about the balloon though because the house will keep appreciating. And if even if we enter a housing..." here she trails off, looking for the right word"...you don't have to worry because THIS house will continue to appreciate - even if other houses see a drop, this one will still go up."
It was all I could not to sceam "DON"T DO IT!"
It was a pretty amazing conversation to listen to.
you should have told them off.
ReplyDeletei'm a loan broker in santa rosa ca,i have been telling people it is a bubble for years,and called the peak last summer when i saw it.it has cost me some business,and one job,and has seriously upset quite a few people...but being straight pays off in the long run.i have been urging people to get out of the market quite strongly since june last year..a few took my advice after looking at the numbers,more told me i was full of it...several of whom now refuse to discuss the market,or avoid me.i do not care for chickenshit liars and will be glad when the people like lereah go back to pimping and selling aluminum siding.
ReplyDeleteI often delete people commenting on deletions.
ReplyDeleteAnon 10:47
ReplyDeleteWOW! Interesting discussion.
I give the realtor credit with creativity "this house is different it will always appreciate". Maybe he should try another approach. I bet I can get the seller to lower the price, if not I will find another house that's been on the market for several monthes and maybe he will be flexible. Gosh darn my transaction commisions will go down but at least I still get some income. This approach will never fly it's too logical. Several years ago I was considering a career change, I'm glad I did not pursue a career in real estate.
>> At least he owns investment condos. Maybe he really does believe his own hype? He actually drinks the kool aid.
ReplyDeleteUnless he's guaranteed a return out of some NAR PR funds.
This is more common than you know - since I started reading footnoted.org I've seen some "interesting" stuff.
Unless we get to see his employment contract, he remains a used-car salesman who was touting one product (which went bust - and the bust of which should have taught him a lesson) and is now touting another (which is starting to go bust - apparently he's impervious to learning).
I was wondering whether or not this really was Lereah's house. After some sleuthing on the Post real estate site and then going over to Zillow, I dug a little deeper. Ironically, if you run the same chart as what David posted, you'll find that the house's value has actually risen again.
ReplyDeleteIf instead of running a 5 year chart, you run a 1 year chart, you get the following (note: these pretty close estimates based on Zillow's chart):
In May 05, the property was worth 851k
Oct 05 - 946k
Nov 05 - 920k
Feb 06 - 940k
Early May 06 - 900k
Late May 06 - 920k
So, in a one year time frame, the property's value (according to Zillow's valuations) rose roughly $70k. It hit a peak of about 940k in February 06, and is now down 20k from that peak.
If you do a 5 year chart, you get the following:
Feb 03 - 610k
Feb 04 - 675k
Feb 05 - 810k
Feb 06 - 937k
Early May 06 - 900k
Late May 06 - 920k
So what does all this mean? Well, it means that according to Zillow, Lereah's home's value has dropped a whopping 2.2% from its peak value!!
Good work Fritz. We obviously are not seeing any great declines thus far.
ReplyDelete2.2% in 9 months + inflation = 6% DECLINE in real dollars.
ReplyDelete"2.2% in 9 months + inflation = 6% DECLINE in real dollars. "
ReplyDeleteUnless you use that money to buy more housing, which, you insist is becoming less expensive.
So if 2.2% decline is a depreciation of an "even faster clip", does that mean that other homes are depreciating at a slower clip of 0%? Or what if there is negative depreciation (also known as appreciation)?
ReplyDeleteSeems like David's position is pretty weak given the very wild valuations from month to month over the past year. While it is possible that the house's value dropped 20k from October to November, a jump of 20k from November to February, a drop of 40k from February to early May, and then a jump of 20k within May - perhaps it's much more likely that the Zillow data is simply not reliable (although David reassures us that the valuation looks right).
If it's true that the home's value has risen by 20k during this month, shouldn't the chart on the home page be updated accordingly?
So if I e-mail him and low-ball an offer, do you think he'll take $750, or should I stick with my plan to offer Martha Stewart $2M, now that her shack is on the block?
ReplyDeleteI am intrigued that David has not replied to my post regarding the accuracy of his posted chart.
ReplyDeleteTHE CHART IS WRONG, INACCURATE AND MISLEADING, DAVID.
Maybe that will get his attention.
I recently interview Lloyd Frink of Zillow.com. He shares how Zillow.com only provides a snapshot of prices.
ReplyDeletehttp://www.npost.com/interview.jsp?intID=INT00149