A History Of Wrong Predictions By The Chief Economists of the National Association of Realtors. This would be the discredited David Lereah and Lawrence Yun.
Click on the image for a larger version. David Lereah left the NAR in May 2007.
Monday, March 24, 2008
A History Of Wrong Predictions By The Chief Economists of the National Assocation of Realtors
A History Of Wrong Predictions By The Chief Economists of the National Association of Realtors. This would be the discredited David Lereah and Lawrence Yun.
Click on the image for a larger version. David Lereah left the NAR in May 2007.
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David,
ReplyDeleteYour analysis is flawed because the trend lines you're using are both biased toward new construction. As one poster explained a while back, even The Case Shiller "City Price" Index gets far more weight from new construction out in places nowhere near the "city" (e.g. West Virginia) than from your average close-in place because of all the new construction and turn over out there. It would be much more accurate if you used a trend line from Shiller that ONLY showed resale values inside the beltway.
What the hell are you talking about Lance? The S&P/Case-Shiller Index only includes resales and doesn't include any new construction.
ReplyDeleteLance,
ReplyDeleteThis post does not reflect what happens inside your world known as inside the Beltway. This post is looking at the national picture.
Lance's "world" as he describes it doesn't exist anywhere on earth, inside the beltway or outside.
ReplyDeleteRemember you are dealing with someone that was arguing that DC rowhouses doubled in price last year.
Lance,
ReplyDeleteThe very first page of the paper explaining the S&P/Case-Shiller methodology (PDF) has the following paragraph (emphasis added):
The S&P/Case-Shiller Metro Area Home Price Indices use the "repeat sales method" of index calculation – an approach that is widely recognized as the premier methodology for indexing housing prices – which uses data on properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit.
That would seem to preclude new construction entirely.
- bb
David,
ReplyDeleteWith all due respect, "new construction" does not equal "national picture". Hence the underlying flaw of this graph.
nice graphic- get that to the WashPost's Kirstin Downey ASAP :)
ReplyDeleteHow's the Dow doing, by the way? You folks getting rich with all of your money in securities?
ReplyDeleteSorry, I referred back to what another poster had discussed some months back about why the Case Shiller index was skewed toward new construction ... But I should have explained the argument he was making so that those new to the blog would understand too. (I'm guessing David, who I was addressing, understood the argument.)
ReplyDeleteBOSTONBUBBLE SAID:
" uses data on properties that have sold at least twice, "
Correct ... The disproportionate number of foreclosures (and subsequent re-sales) on homes constructed over the last 5 years or so in the exurbs are skewing Shiller's numbers in the Washington/West Virginia area he calls a "city". This city is of course a contrived "city". In the real city and surrounding areas (where most of us live) these numbers just don't hold up.
Correct ... The disproportionate number of foreclosures (and subsequent re-sales) on homes constructed over the last 5 years or so in the exurbs are skewing Shiller's numbers in the Washington/West Virginia area he calls a "city". This city is of course a contrived "city". In the real city and surrounding areas (where most of us live) these numbers just don't hold up.
ReplyDeleteHow is that a problem when the focus is on national prices, as it was in David's chart? I would think that when seeking to formulate a national picture, the more exurbs included, the better.
As usual lance you are in way over your head.
ReplyDeleteHere is some information on the methodology behind the Case Shiller Index, information you probably should have looked up before making a fool of yourself again.
First, as was already explained, new construction sales are excluded.
Second, foreclosures, AND THE SUBSEQUENT RESALE are also excluded. Sales to or by banks/lenders are NOT included in the Case Shiller Index.
Third, the Case Shiller Index excludes all sales that take place within 6 months of another sale. This is to exclude flippers doing things like buying new homes or foreclosures and then reselling them. (this further reduces the impact of both new sales and foreclosures on the market)
The only way a new sale or foreclosure becomes part of the Case Shiller index is if it is purchased by a private individual, then held for at least 6 months, before being sold in an arms length transaction. If the above criteria are met then it is very likely the sale is in fact representative of the market at the time the sale took place.
We get it, you don't like the story the numbers tell, but do you really have to make a fool of yourself trying to attack the best numbers available? The Case Shiller Index is widely considered the most complete and accurate measure of real estate prices available.
There is nothing "panglobal lance" can do to sway the opinion of actual experts.
lance said "these numbers just don't hold up."
ReplyDeleteYou have no evidence to support that statement in your effort to discredit Shiller's data regarding this area. If you do, post it. If you don't, do us all a favor and shut-up.
ALL,
ReplyDeleteLance is just another Realtor/re insider that is working to discredit the S&P/Case-Shiller data as well as other accurate home price data.
NAR has finally realized that they need to attack the price reports... thats why Yun wrote his piece on Shiller and why other realtors are actively attempting to muddy the water.
The S&P/Case-Shiller, Radar logic and OFHEO data essentially all indicate the same thing... unprecedented declines to residential real estate prices... plain and simple.
At this point it is perfectly clear that it would be folly to listen to discredited liar realtors any longer.
"Lance is just another Realtor/re insider that is working to discredit the S&P/Case-Shiller data as well as other accurate home price data."
ReplyDeleteLance is a failed realtor, but that isn't what you can attribute his presence here to. (In one of his more honest moments he said he used to hold a RE license but only achieved something like one sale before giving up.)
He is here because he bought at the top of the bubble and now feels he needs to defend his house from price declines. That is why it is all so personal for him and why he is absolutely unwilling to accept the facts.
All of the lame pop-economic theories, all of the misunderstood economic principals, all of the outright errors and lies... it all comes back to his own unwillingness to admit that he isn't the genius he thought he was.
LOL ... yeah, that's why Zillow.com (and other valuation tools) have my house valued at about 50% more than I paid for it in 2005.
ReplyDeleteI can understand the bubble theory giving hope, but I still hate to see people hanging all their hopes on it. It's just so much easier to do a researched, smart purchase instead ... like I did. But c'est la vie. Some people rather just believe that it'll just fall in their laps. Good luck.
Sorry SoldAtTheTop, I think you're wrong about Lance. I don't think he's a Realtor or industry insider, I think he's just a good old fashioned troll. He doesn't actually believe what he writes. His arguments are weak to begin with and he never defends them, choosing to change the subject or throw up fallacies instead whenever somebody calls him out. I don't think he does this because he's dumb - he writes a little too well to be as dumb as his arguments would suggest. He's trying to get a rise out of you.
ReplyDeleteMaybe Zillow will buy your house or help you refinance. LOL
ReplyDeleteLance said...
ReplyDelete“I can understand the bubble theory giving hope, but I still hate to see people hanging all their hopes on it. It's just so much easier to do a researched, smart purchase instead ...”
What “research” tools do you use?
Lance, If I had listened to you for the past two years, I'd be broke right now. The properties that I own, in and outside the beltway, are taking substantial hits. I am not not acquiring any additional residential properties in the foreseable future.
ReplyDeleteI think it is time for you to turn in you "R" brooch
-waiting for godot
Robert asked:
ReplyDelete"What “research” tools do you use?"
My feet for starters ...