Chicken Little's revenge
The August new-housing-start numbers are out, and they're not good, dropping by more than analysts expected.
But the heck with the numbers. According to David Lereah, chief economist at the National Association of Realtors, this was all to be expected. "The housing boom ended more than a year ago, but sellers are having a tough time accepting that fact," said Lereah. "The result has been tumbling sales as buyers stay on the sidelines.”
The busy beavers commenting at the Housing Bubble blog, who have been grinding their teeth over Lereah's self-serving interpretations of real estate data for years, were quick to dig up a quote from exactly "a year ago."
"With a general background of growing population and favorable affordability conditions, home sales are staying at very healthy levels," said Lereah. "As a result, we'll continue to see above-normal home price appreciation for the foreseeable future."
Lereah is quoted in nearly every article that reports new-housing data, as if he were some kind of impartial source, instead of a spokesman for the real estate industry and the author of a book whose 2005 title was "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 to Profit From Them." But personally, I didn't think the above quote was all that damning. So I went looking for more and found the latest proof that on the Internet, there really is a blog devoted to everything an info junkie could possibly need. I give you David Lereah Watch.
There, we can find a picture of a Power Point slide from October 2005, in which Lereah called two of the biggest predictors of a housing bust, Yale's Robert "Irrational Exuberance" Schiller and Dean "Beat the Press" Baker, "Chicken Littles." We also learn that in February, the title of his book was changed to "Why the Real Estate Boom Will Not Bust -- and How You Can Profit From It."
We're looking forward to the 2007 title: "Busted! Why You Should Have Listened to Chicken Little, Instead of Me."