The housing bubble peak was five years ago. Here is the value of David Lereah's 3,068 square-foot home since then:
And, yes, David Lereah lives in the Washington, DC metro area, which gives lie to the idea that home prices in the DC area don't fall.According to The Wall Street Journal, David Lereah drives to Dunkin' Donuts or McDonald's for breakfast every morning. The closest to his home are both in the same strip mall right by the GMU Fairfax campus.
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Ahhh memories.
ReplyDeleteSpeaking of which, James, do you ever talk to Co-Blogger david? Is he still happy with his purchase a year or so ago?
David Lereah lives in the Washington, DC metro area, which gives lie to the idea that home prices in the DC area don't fall.
ReplyDeleteWait. Who ever said that? Actually, to most of us it was pretty obvious that the exurbs were hyper-inflated, and ready for a collapse.
The argument we made was that the run-up in prices in close-in areas was due to changing preferences and the resultant renaissance of the city core and close-in suburbs.
The entire crux of the argument was that the "DC Metro area" is useless as an aggregation. In other words, the opposite of "the idea that home prices in the DC area don't fall."
Thanks for the cheap misrepresentation, though.
The "renaissance" itself is evidence of a dark age for the "urban core". Things change.
ReplyDeleteSometimes, the change is very rapid.
David still blogs here. However, as a property owner now, he blogs anonymously as an advocate that the local market has reached sensible values.
ReplyDelete"James said...Bubble Meter has long had a tiff with David Lereah"
ReplyDeleteIndeed. As a long time reader, this reminds me of one of the funniest posts I have seen here (and I swear I didnt write this)
"Anonymous said...
James and David share a secret passion for "Mr. Lereah". Clearly, there is a sexual component to their obsession with the man.
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.
The only question is, did they do this solo? or as a couple?
January 13, 2009 3:23 PM"
God damn, that was funny!!!
Maybe you should take your sick humor to a porno blog because that's very strange that a 2009 entry of that nature would leave a lasting impression on you. WIERDO!
ReplyDeleteHey - what can I say, I like fart jokes & other sophomoric humor. Thus, that was pretty funny IMO...
ReplyDeleteAnonymous said...
ReplyDelete"Speaking of which, James, do you ever talk to Co-Blogger david? Is he still happy with his purchase a year or so ago?"
I haven't heard from David in a very long time. He does leave a comment a few times per year. I noticed that he put that Iacono Research advertisement in the sidebar. David almost never blogs, and I doubt he even reads Bubble Meter much anymore.
Anonymous said...
ReplyDelete"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."
We don't stay in the car. We climb through the window and have sex with Lereah's wife.
By the way, David Lereah knows about Bubble Meter. He's mentioned it in the press. He said it made his mother cry. I bet he probably reads it from time to time and leaves crude comments to get his revenge.
I was thinking the same thing...I bet it's that Lereah reserecting that comment. So Mr. Lereah, are you permitted to live near schools?
ReplyDeleteIt looks like DC is still overvalued. According to the excerpt below from the WSJ.
ReplyDelete"At the peak, midway through the last decade, a home in Los Angeles cost the equivalent of 4.5 years' pay. The average price has since fallen to just over two years' income now. That's well below its pre-bubble average of 2.6 years. This means average Los Angeles homes are cheaper in "real terms" than they were typically during the period 1989 through 2003.
The opposite is true around the Washington beltway, where it will take 26 months of pay to buy a home, versus the historical norm of 22 months."
The "renaissance" itself is evidence of a dark age for the "urban core". Things change. Sometimes, the change is very rapid.
ReplyDeleteThe pendulum swings, you are correct. In the 50s and 60s it began to swing out towards the exurbs--and a lot of folks were caught with their pants down. After all, how could real estate in the city ever decrease in value?
Of course, there are always folks who fail to see plain social trends staring them in the face. As the population of the suburban poor continues to shoot up, and the wealthy continue to congregate in the city, my guess is that change *will* be pretty rapid once things reach the tipping point.
Probably will be set off by the run-up in energy prices.
Anon said "DC is still overvalued".
ReplyDeletePerhaps you should check out Mark Zandi's most recent comments on the DC market. He said that due to structural economic changes, DC will never return to historical levels.
The biggest threat to the DC market is if the Federal Government goes out of business or moves. I don't see either happening.
ReplyDeleteActually, a moving the Las Vegas might be fun. Talk about a stimulus project. Two to four trillion dollars ought to do it.
Even if the Tea Party takes over completely, the Federal Government will remain a huge employer and after a period of adjustment will resume its upward trend.
If the Communists take over and seize all private property, well, that's another matter.
So Lance is in the black. Cool. Good for him. Now if he doesn't have a trick loan that he can't afford after it converts he'll be fine. Go Lance.
Did anyone see last week that nationally the average homeowner is sitting on 2.6% equity in their home? Ouch.
jj
Tens of thousands of government employees have bio/chem hazard masks at their desks.
ReplyDeleteThere are bio/chem sensors in the Metro stations.
There are bio/chem sensors on street lamp posts around the city.
A little snow at rush hour, and millions of people are stuck in or near the city core.
Yeah, the only risk to property values is a "communist takeover". {wink wink}
"None said...
ReplyDeleteSpeaking of blasts from the past: look up the Zestimate for Lance's home in DC and check out the comps. He's in the black."
It is really amazing how well some of the "immunozones" held up for the last 5+ years. For much of the DC area, and most of the country, this past decade will be remembered for monumental gains followed by monumental declines.
In the immunozones, it will be remembered as the last time the immunozone hoods were ever truly affordable...
"....ever truly affordable..."
ReplyDeleteAffordability is a relative concept, isn't it? Perhaps at your salary, certain neighborhoods are unaffordable. Many other people have the financial means to live wherever they desire.
Get back to work.
2011 will be the real test for the DC area housing market. Currently, it remains constipated. However, it's about to have a good flushing.
ReplyDelete"2011 will be the real test for the DC area housing market. Currently, it remains constipated. However, it's about to have a good flushing."
ReplyDeleteOooooo - scary!!!! Say, arent you the same guy who said that in 2009, and again in 2010? How did that work out?
In all seriousness, other than price what makes you conclude the market is "constipated"?
So let me understand this house ownership issue. If I purchase a $400,000 home and put $50,000 down, @ 5% mortgage rate for 30 years, once I pay the home off in 30 years I would have paid $676,000 including interest for a $400,000 home? What fucking clown would do such a thing? Who in their right mind would do such a thing? Could anyone show me why it is wise to buy a home?
ReplyDeletePrior to WWII, housing was consider a durable good. It was not considered an "investment".
ReplyDeletePrior to WWII, most people weren't overweight, either. Unlike today.
"So let me understand this house ownership issue. If I purchase a $400,000 home and put $50,000 down, @ 5% mortgage rate for 30 years, once I pay the home off in 30 years I would have paid $676,000 including interest for a $400,000 home? What fucking clown would do such a thing? Who in their right mind would do such a thing? Could anyone show me why it is wise to buy a home?"
ReplyDeleteWell its either that or rent forever. @ 2,000 a month, and assuming no increases (which wont happen BTW) for 30 years, you pay $720,000. In 40 years its $960,000. In 50 years its $1.2million.
So take your pick. Or just save all your money and go ahead and die now...
Mortgage debtors incur much more costs over the long term than do renters. New roofs, lawn care, HOA fees, leaky faucets, failed hot water heaters, etc. are all items that debtors must deal with.
ReplyDeleteNow, if you own your home outright (as opposed to being a debtor), then total cost of ownership will indeed be lower than renting.
"Mortgage debtors incur much more costs over the long term than do renters. New roofs, lawn care, HOA fees, leaky faucets, failed hot water heaters, etc. are all items that debtors must deal with."
ReplyDeleteYou do realize that Landlords (especially when dealing with someone who per my example will be leasing forever) build those things into the rent that they charge, right?
Who stays in a home for 30 or 40 years these days? Your assumption is based on a society 50 years ago.
ReplyDeleteWhat I find interesting is that if someone pays $676,000 for a $400,000 home it makes sense according to the home ownerhsip advocate. However, if someone buys a car that is worth $30,0000 but pays $38,000 upon completion of loan payments, they are dumb.
ReplyDeleteSo, no one has really made the argument for home ownerhsip. In the 21st century, very few people stay in their homes for 30 years. The transaction costs of buying and selling a home are significant (closing costs, property taxes, paying a commission of 3-6% commission of the seeling price).
ReplyDeleteThese days, many landlords are unwilling landlords. There are millions of vacant homes. Their owners never intended to rent the homes out; but they have no choice due to dire economic circumstances. Millions of unwilling landlords are lucky to have a renter who covers the mortgage payment.
ReplyDeleteMobility in the 21st Century. If you don't have it, you are at a disadvantage.
ReplyDeleteRight: Landlords set whatever price they want, and renters have no choice but to pay the price that was set for them by the landlord.
ReplyDeleteHey, I have a bridge in Brooklyn I'm selling for a low, low price...