Monday, September 24, 2007

David Lereah Says "They Were Wrong Too!"

David Lereah, the fully discredited, former chief economist of the National Association of Realtors shot back at the housing bears who in his mind were also wrong.
“Even the people that were talking about booms busting, my goodness they were talking about it in 2001 and 2002,” said David Lereah, the former chief economist with the National Association of Realtors. “And they were wrong for four years and they only became right at the end of 2004.” He and his former employer had been criticized for the optimistic forecasts they made during the boom. (NYTimes. September 23rd)
Sure, some of the bears predicted the boom would end much sooner then it did. But, it is also true that many of the bears correctly pointed out that in 2002 some housing markets were already in a a bubble. Just because the bubble continued to grow, does not negate the reality that certain housing markets were already bubblicious.
Posted by David at 2:23 PM
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7 comments:

  1. wannabuySeptember 24, 2007 3:08 PM

    I'm going to admit I wasn't yet a bear in 2001 from this bubble... I was from the dotcom... problem solved and I wasn't a bear for quite a few years. :)

    I cannot wait for Case-Shiller tomorrow! Go to open houses, the mood is so different from three months ago. (Be quiet and observe. Trust me on this.)

    Got popcorn?
    Neil

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  2. AnonymousSeptember 24, 2007 8:06 PM

    Hey, how about this special attention to the DC market? Like, what does Moody's Economy.com say about DC in their forecasted declines?

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  3. AnonymousSeptember 24, 2007 8:34 PM

    Say Wannabuy, don't forget to mention that Billions of dollars of Alt-A and Subprime loans will reset through the month of October, per The Credit Suisse report.

    I can't recall the address for the
    Credit suisse report. Perhaps you could provide the link for us?

    Looks like it is going to be one scary halloween this year for borrowers. :(


    From the ocregister, they predict pain for borrowers to reach its worst in March 2008

    http://tinyurl.com/2pjlk7

    At this rate the housing meltdown will reach Cherobyl status soon.

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  4. AnonymousSeptember 24, 2007 9:03 PM

    I think we have yet to see if housing bears were wrong-- but they look pretty right.

    If most people who bought a house in 2001-2003 can afford that house (and all its repairs and maintenance), and are willing to forego the greater returns they would have gotten investing in commodities (or even many stocks), then those people were "right" to buy.

    If those people HELOCed their loan over 2004-2005, or if you are talking about someone else who bought over 2004-2005, then those people have a huge shaft a comin'.

    Since most homes seem to be bought on 15-30 year contracts, a bear can be "wrong" for three years and still be right overall.

    I started looking in 2002-2003 in the DC area. I quickly stopped. There was too much competitive bidding on old homes that needed many expensive repairs. Instead, I rented as I watched home prices go through the roof. But now, a few years later, I look back on 3-4 of the best years of my life, when I had no financial concerns as a very stable, well-housed renter, and am now richer (due to various investments) than I would be if I had bought. Not buying in 2003 was one of the best decisions of my life.

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  5. marinite2September 24, 2007 9:11 PM

    And what is the point of warning of a bubble if the criterion for success is to only warn of it at the point in time when it pops? Lereah is an idiot who will try anything to save face.

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  6. wannabuySeptember 25, 2007 9:21 AM

    David,

    Case Shiller down:
    http://biz.yahoo.com/ap/070925/home_price_index.html?.v=3

    DC was not on the short list of rising cities. But I didn't find its status in the group.

    4.5% drop in RE prices for a nation is amazing. Oh lookie... its happened before. So real estate doesn't always go up. ;)

    Got popcorn?
    Neil

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  7. wannabuySeptember 25, 2007 11:11 AM

    David,

    Found DC's Case-Shiller on Calculatedrisk. Down 7.2% YOY. Wow! I was bearish, but not *that* bearish. Even mother LA saw a good size drop.

    And recall, that is July Case-Shiller. We saw the "credit crisis" impact in mid-August.

    Conveniently in line with what I posted before. Home prices are staring to drop fast. Sellers might not know it yet, but from what I've seen, the buyers sure do. And its a buyers market.

    Got popcorn?
    Neil

    ReplyDelete

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