Once one of the world's most-visible housing experts, Mr. Lereah is disconnected from his old life. The former chief economist for the National Association of Realtors says the group's top executives won't return his phone calls. He says he wasn't invited to the association's 100th birthday bash last May. ...The article also says he likes to drive to Dunkin' Donuts or McDonald's every morning. The Dunkin' Donuts shop closest to his home is right across the street from GMU's main campus. If memory serves me correctly, there's a McDonald's in the same shopping center.
Mr. Lereah continued to make rosy statements amid growing signs of a housing downturn -- like this declaration in January 2007: "It appears we have established a bottom." ...
Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts -- then was left to shoulder the blame when things went sour. "I was there for seven years doing everything they wanted me to," he said, looking out his window to his tree-filled yard in this Washington suburb. Mr. Lereah now works at home, trying to rebuild his career and saddled with a sagging portfolio of real-estate investments.
A spokesman for NAR says Mr. Lereah used the same kind of forecasts in his book, which wasn't an NAR publication. ...
Soon, mainstream economists and the press were calling him out. "I thought it was criminal that he kept saying we'd reached bottom," says Ivy Zelman, former housing-market analyst at Credit Suisse and now head of her own housing-sector research firm. She says she dubbed Mr. Lereah "Mr. Liar-eah."
Mr. Lereah says he was starting to worry about the housing market and tried to tone down his optimistic comments.... He says his critics nevertheless "became vicious."
Mr. Lereah admits to one mistake: believing there would be no national housing crash. "I have to take the blame for that," he says. "I never thought it would be as bad as this." ...
Mr. Lereah's real-estate portfolio has taken a hit. He says his 3,068-square-foot five-bedroom, 5½-bathroom brick house has lost about 20% of its value in the past two years. ... His condos are down, too. He now says housing prices won't recover for some time.
For more on David Lereah, read David Lereah Watch.
Posts
"Mr. Lereah's real-estate portfolio has taken a hit. He says his 3,068-square-foot five-bedroom, 5½-bathroom brick house has lost about 20% of its value in the past two years."
ReplyDeleteI hope his condos are in financially devastated PWC - that would be poetic justice...
Sorry, his condos are not in PWC. From the article:
ReplyDelete"He snapped up condos, including two in Washington in 2003 and 2004 and one each in Tampa, Richmond, Va., Alexandria, Va., and Naples, Fla. By 2006, he says, he owned six condos worth between $150,000 and $400,000 apiece."
James and David - The graphic on page 12 of this NVAR presentation is kind of interesting. It shows price to income by county as compared to the "historic" average.
ReplyDeletehttp://www.nvar.com/Portals/1/marketstats/2008yearendpressconference.pdf
The outlying areas are close to historic levels of affordability, while Arlington and Alexandria still have a lot of correction ahead in order to revert to the mean.
James and David share a secret passion for "Mr. Lereah". Clearly, there is a sexual component to their obsession with the man.
ReplyDeleteI wouldn't be surprised at all if they both drove to Mr. Lereah's house after dark, parked on the street in front of the house, and masturbated to completion before driving off.
The only question is, did they do this solo? or as a couple?
HA!!! Even back in 2000 it looks like Arlington & Alexandria werent affordable when compared to median incomes.
ReplyDeleteAnd to think, that was back when there was still public housing, homeless shelters, and no retail other than a place to get your cornrows done. Imagine how much more valuable they are now!!!
anon 1:15pm - yep, all Arlington had in 2000 was cornrow shops. LOL.
ReplyDeleteAnd you miss the point of the graph, which is that current prices are not affordable to current incomes (whether the incomes are from those with cornrows or not).
"New census estimates say that the white share of the population has risen since 2000 in the District, Alexandria and Arlington and that the region's outer counties are becoming increasingly racially and ethnically diverse."
ReplyDeleteLets see, Arlington & Alexandria werent affordable back in 2000 when they were more diverse. Now in mid decade, heres a graphic indicating a bunch of white people moved in. Hmmm - well, good thing is they certainly dont have any money. After all John Fountain has told us nothing has changed in these areas since 2000.
http://www.washingtonpost.com/wp-dyn/content/graphic/2005/08/11/GR2005081100120.html
What white people are moving back into the cities in mid decade. Well good thing is,
Remember, as John Fountain tells us, nothing has changed since 2000...
ReplyDelete"The city and those close-in Virginia suburbs had higher percentages of non-Hispanic white residents in 2004 than in 2000, a reversal of past trends, the estimates say. Minority groups grew more slowly than in the past, or declined.
In the District, Arlington and Alexandria, whites became a larger share of the population -- by a rate that ranked in the top 10 among the nation's jurisdictions, according to Brookings Institution demographer William H. Frey.
Frey said the diversification of the region's outer counties meshes with what's happening nationally on the fringe of urban areas. But the growing white population in the District and two close-in counties stands out among metropolitan areas, he said, reflecting the desirability of core neighborhoods among those who can afford to move there, who are most likely to be white."
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/10/AR2005081002032.html?sub=AR
Copyright The Washington Post Company Aug 20, 2001
ReplyDelete"Serious crime has plummeted. Pricey town houses occupy once- vacant lots that used to be littered with syringes, bottles and even a parked car that hookers used. Businesses are moving in. And from a distance, the racial mix looks to be the elusive dream of blacks and whites living side by side.
But in the Alexandria neighborhood known as the Inner City, the mood is anything but contented.
Community matriarch Helen Miller wags a finger at the agents of change. "They want to change the neighborhood to Old Town, but they're not going to," she said firmly, referring to the celebrated and wealthy area just blocks away.
Miller's complaint is rooted in this statistic: The black population in the seven square blocks that form the Inner City has dropped by half in the last 20 years. In 1980, the area was 90 percent black. Today, blacks make up 45 percent of the population."
http://www.parker-gray.com/pdfs/Post_Articles/Black_Enclave_Shades_of_Gray.doc
Hmmm serious crime plummets, crack houses are renovated and lived in - syringes and hookers are gone - townhouses and businesses move in. Im sure this did nothing for the value of Parker Gray.
Then again, since this isnt Clarendon or Ballston, John Fountain can claim that nothing changed there since 2000.
Did you guys not read his follow-up comment? He's saying Arl and Alex haven't changed since 2000; he notes that the report measures current prices against current incomes, and that ratio is still higher than 2000 prices over 2000 incomes.
ReplyDeleteMeant to write, "he's *not* saying" Arl and Alex haven't changed...
ReplyDeleteJohn Fountain - maybe you dont recall the heroin and (later) crack epidemics that were roiling the close in areas less than 20 years ago. Heres an article from 1989 describing the northern half of Old Town - the city was freaking out of control.
ReplyDelete"Alexandria Drug Crisis Described; No Streets Are Safe, City Officials Told
From: The Washington Post | Date: November 14, 1989| Author: DeNeen L. Brown | Copyright 1989 The Washington Post.
There were some success stories at last night's meeting called by Alexandria Mayor James P. Moran Jr. to assess local anti-drug efforts. One was about the neighbors on North Alfred Street who gather outdoors every Friday night to reclaim the area from drug dealers.
But Moran and other city officials who came to the meeting at City Hall heard many more negative accounts.
"Don't go home thinking we have success. We have only failures," Trig Johnson declared. Johnson, who lives in the city's Parker Gray area, told of watching two girls in the neighborhood grow up and turn into drug dealers."
http://www.encyclopedia.com/doc/1P2-1223053.html
Oh and regarding that last article, that was 1989. That same area where the crack houses were are now reconverted into 600K townhouses.
ReplyDeleteAt what point did people decide it was safe to gentrify the area? At what point did they decide the crack dealers werent coming back? Well, considering things got worse til 1991, it was at least a few years after that - maybe 1997-1998 is when people really started thinking, hey this might be an OK place to live.
Then again, this isnt Ballston or Clarendon - therefore it proves gentrification didnt happen right?
John Fontain said...
ReplyDeleteJames and David - The graphic on page 12 of this NVAR presentation is kind of interesting. It shows price to income by county as compared to the "historic" average.
That slide show is all spin, which demonstrates that the Realtors are still being exceptionally dishonest. In fact, even their graphs are questionable. According to page 12, the ratio of median home prices to median household income in Fairfax County is roughly 3.2 or 3.3. However, according to Fairfax County's own median income numbers, median household income was $105,241 in 2007, and according to Zillow, Fairfax County's median home price is roughly $424,500. That results in a much higher price-to-income ratio: 4.0.
Even if you assume a 5% increase in average household income since 2007, which is a generous assumption given the state of the economy, the price-to-income ratio would be about 3.85, which is still far higher than the number the Realtors are claiming.
"For the past decade, as Clarendon has blossomed from a raggedy collection of car repair shops and empty storefronts into one of the Washington area's most vibrant urban suburbs...
ReplyDeleteJust up the road, in the section of Clarendon known for the past quarter-century as Little Saigon, one of the last remaining Vietnamese restaurants has gone out of business...
"All of Clarendon has changed," says Rebecca Tax. "When you bring in the big chains and charge $200,000 for 560-square-foot condos, it's going to bring a new kind of people...It used to be a lot of cool, young, down-to-earth families around here, and it's not anymore. It's a much richer, more singles crowd, more a drinking crowd now."
http://www.washingtonpost.com/wp-dyn/content/article/2006/08/02/AR2006080201615.html
John - you better put a stop to this. You cant let Marc Fisher go on and on about how much Ballston has changed. Here is a link to his blog:
http://blog.washingtonpost.com/rawfisher/
Why dont you write in and tell him how wrong he is. As we all know - no gentrification has taken place in Ballston it was immune to the forces reviving the rest of the core areas!
anon 4:23pm - i suggest you study what the term gentrification means. a neighborhood of mostly college-educated white people losing a Blockbuster video and having it replaced with an Orvis doesn't fit most peoples' idea of gentrification.
ReplyDeleteRaggedy car shops and empty storefronts means nothing to you? Little Saigon?
ReplyDelete"James said
ReplyDeleteHowever, according to Fairfax County's own median income numbers, median household income was $105,241 in 2007, and according to Zillow, Fairfax County's median home price is roughly $424,500. That results in a much higher price-to-income ratio: 4.0."
Botched reading James! The realtor PDF used median incomes for Sept 2008. Per MRIS, median incomes in Fairfax County in Sept was 326K.
http://www.mris.com/reports/stats/route.cfm
So take the 105K income and the 326K median price, suddenly you are getting awfully close to 3X income.
I didn't know MRIS measured incomes. Fairfax County median household incomes are definitely not 326K.
ReplyDeleteBy the way, that's a bad link. It just gives a 403 Not Found message.
" Per MRIS, median incomes in Fairfax County in Sept was 326K. "
ReplyDeleteThat commenter meant to say "median price" was 326K.
What a bunch of dolts. Get back to drooling over Lereah.
"James said
ReplyDeleteFairfax County median household incomes are definitely not 326K."
James - read em & weep!
http://www.mris.com/reports/stats/
Actually, yeah, I just realized my mistake. Good catch Anon.
ReplyDeleteFunny thing is James knew it too. However, he was too embarassed to let that go - he had to get in his little dig...
Anonymous said...
ReplyDelete"Funny thing is James knew it too. However, he was too embarassed to let that go - he had to get in his little dig..."
Yeah I knew it. However, I am prone to sarcasm, which doesn't always come across well in text. Everyone makes mistakes. I made my own mistake as well, referring to a URL as a "link", when there was no actual hyperlink.
Now that that is settled, get back to work and sell some houses.
By the way, according to the MRIS data, Arlington median home prices were down 11.43% YoY in December. DC median prices were down 12.5%.
ReplyDeleteThis whole real estate discussion is becoming booooring.... We are way beyond that. All this does not matter. The US economy and the Dollar are heading towards collapse. Welcome to the Third World!
ReplyDelete"By the way, according to the MRIS data, Arlington median home prices were down 11.43% YoY in December. DC median prices were down 12.5%."
ReplyDeleteWouldnt you think the person who sent you the MRIS link would know that? Wouldnt you think I have spreadsheets with MRIS data on all counties going back a few years?
Time was, David would do a MRIS county by county breakdown on prices and inventory. Then he realized how unspectacular the bust would be inside the beltway and just gave up...
Incidentally, had you paid more attention to this, you would have noticed DC posted a -17% median price drop in Sept 2007. It was at that time that this blog went hyperbolic with hundreds of calls "its moving in - DC isnt immune".
ReplyDeleteProblem was, there have been lots of months with median prices with "+" signs next to then since Sept 2007...(9 months had "+" signs, 5 months had "-" signs), and its all those stupid little "+" signs that prevent housing prices from falling.
Note, I think the increases DC is seeing are a bit deceiving. DC has some underlying problems I see in the data that will cause it to give back alot of the gains it made in the last 2 years.
If people are lucky, I think DC median prices will drop 8-10% in 2009, meaning that DC median prices will have "only" gained 126% since 2000...
Just a 126% increase in DC prices since 2000!!! Just 126% increase!!!! That is called insanity! There's no reason to justify this increase.... no reason at all!!! So the only direction is down way down......
ReplyDeleteI just heard that Bank of America is in dire straight!! The US folks is running on empty. God help us!!
"I wouldn't be surprised at all if they both drove to Mr. Lereah's house after dark, parked on the street in front of the house, and masturbated to completion before driving off."
ReplyDelete...and David, I could see you coming out to the car handing them a towel and a copy of your book....
James, good points on January 13, 2009 3:37 PM on median household income in 2007 as $105,000.
ReplyDelete"There's no reason to justify this increase.... no reason at all!!! So the only direction is down way down......"
ReplyDeleteTell that to the hundreds of buyers who show up month after month, perfectly content to pay these prices...
The correction is only begining... Sooner or later, prices will drop below the mean.
ReplyDeleteGary
Gary, from your mouth to God's ears.
ReplyDelete