Ultimately, Sellers Will Relent In Florida: NAR
Some housing bubble reports from Florida. “The housing standoff between buyers and sellers in South Florida will continue for another six months, and then prices in some areas will fall, a well-respected economist predicted Tuesday. In some cases prices may fall by 10 percent to 15 percent, said David Lereah, the National Association of Realtors’ chief economist.”
“‘We are not in a crisis but a transition,’ said Lereah. ‘I am very bullish in the long term for real estate in Florida.’”
“Lereah pegged the end of the housing boom to August 2005. That’s when mortgage rates crept up and speculators fled. Now, he said, home sales are declining. And the inventory of homes for sale has ballooned because stubborn sellers refuse to lower prices and buyers are ever willing to wait it out. Ultimately, he said, sellers will relent.”
“‘When a transitioning market cools, it’s the sales that drop first, and then prices,’ Lereah said. Lereah said speculators are fleeing the market. He contends that speculators are most to blame for huge price hikes. ‘Florida will be better for it with them gone,’ he said.”
“Higher interest rates could pinch. Lereah calls raising rates ‘a mistake right now.’ Many recent buyers, especially in extra-pricey California, financed properties with interest-only loans at adjustable rates. Some buyers could lose their homes, if rates go up even half a percentage point over the next year, he warned.”
From Florida Today. “Single-family homes in Brevard County were over-valued by 54 percent in the first quarter of this year, according to a new study. An economist involved in the study said that could mean a sizable adjustment in the housing market is on its way.”
“Broker Betty McCluskey said she might quibble with Brevard being 54 percent overvalued as the study claims, but there’s no question area prices escalated too quickly recently. ‘Our market got out of control,’ McCluskey said, adding that sellers are cutting prices because of growing inventories.”
“‘On a daily basis, we have properties’ selling price reduced, reduced, reduced,’ she said.”
“In some cases prices may fall by 10 percent to 15 percent”
Thats nominal prices. Real dollar price declines would be more. Does David ‘Soft landing’ Lereah still believe in a soft landing?
He is changing the tune as reality hits him in the face.
David
http://bubblemeter.blogspot.com
He sounds like he has been reading here. Ok, which one of you guys is DL?
Remember “RE King”? That would be my bet.
Hey if Lereah says conceeds 10-15% then it will probably be 20-30%.
Beaconst?
Okay, okay, you got me…It’s me.
He contends that speculators are most to blame for huge price hikes. ‘Florida will be better for it with them gone,’ he said.
Doesn’t this board have a record of Lereah flipping multiple properties? I thought I saw that once.
Lereah just sold all his properties and he isn’t buying. That is why it is now ok for him to predict that prices will fall.
BWAHAHAHAHA
Then after he beats them to death he will be buying on the bottom and talking about how great it is to buy a house.
This is completely infuriating. First, he’s telling everybody to keep buying because there is no bubble. Now he wants the Fed to prop up this Ponzi scheme with a questionable (some would say damn near lunatic) inflation policy?
Grrrr….
I am imagining DL having to say that and then excusing himself to the bathroom, looks at himself in the mirror and then throws a silent tantrum.
Actually, it’s a relief. When the biggest RE shill on earth is soft peddling his own product, you know the end is near.
LIEreah is starting to wake up to reality. He sounds like a poster here now. What happened to the permanent plateau theory?
http://www.novabubble.blogspot.com
Don’t you wish that some reporter with even an inkling of financial sense would take Lereah to task for his comments over the past year?
Maybe they could do a 1/2 second of research and look at his book cover from last year, this guy is back pedaling now and he shouldn’t be allowed to get away with it.
Email sent to reporter:
M.H.
At the risk of starting off on the wrong foot, may I ask why you became a reporter?
You have the nation’s most enthusiastic real estate cheerleader contradicting everything he has been saying for the past 3 years and you don’t call him on it?
Take a stand.
Excellent…
Letter I sent earlier this morning:
David Lereah is neither “a well-respected” nor an “economist.”
His predictions have been uniformly inaccurate for the last year. It is a serious breach of reporter ethics to have not checked his record and to additionally not disclose his conflict as the author of a recently released, upbeat book encouraging real estate investment.
Enjoy your posts Robert. Keep’em coming…
Well put, and I hope it has an effect on the author’s next article.
It already has had an effect. The author replied very quickly with a very satisfying explanation and promises of future rigor. I don’t disclose e-mail contents but the reporter has addressed my concerns fully.
Great to hear, so thanks for the followup.
Yeah, he is blaming speculators, he was the one who gave most of them the idea!!! What a jerk!!!!!!
This is my e-mail to so called reporter:
:”My name is Mike Ci–ski and I am a Realtor.
I am outraged by Your manipulation of the truth and complete lack of professionalism.
You called Mr. Lereah respected economist. Your reporting is nothing but shilling.
Mr. Lereah is a straight face Lier who pomped the public with “there is no bubble” statements for years and you neither have no knowledge nor decency.”
AMEN BROTHER!
I’m not defending the substance of Mr. Lereah’s past pronouncements, but it’s naive to think that anyone is going to make public statements injurious to their source of employment. He has been doing his job as a shill for his employer and doing it to the best of his ability. That being said, it’s a sign of how deep the crisis really is that he’s willing to concede significant ground fairly early in the game. His willingness at this point to concede price reductions of 10-15% suggests that prices will actually fall 30-45%. Remember, his job continues to be to put the viability of the real estate market in the best light possible. If a 10%-15% reduction is the best possible light, things must be getting very dark indeed.
My thinking is that the strategy of the NAR now is to make the call of 10%-15% reductions so that all the sellers they see waiting it out right now in this “stand off” will jump back into the market when they see those reductions come to fruition. They see the probability of 30%-50% reductions and a dead market for years, and obviously don’t want that to happen. So, they concede they’ve lost the “top” and salvage what they can. Call the 10%-15% reductions so everyone will start jumping back into the market at that point, thus making the correction short lived.
That’s my concpiracy theory for the day.
I had the same thought.
BTW, I have noticed the Northern Nevada MLS seems to have stoped growing. Any thoughts on why?
People probably think the last few months of low appreciation was a minor correction. They’re probably waiting for the next big upturn in prices which in my opinion won’t arrive until 2010 or later after the reversion to mean / crash.
http://www.benengebreth.org/housingtracker/location/Nevada/Reno/
Seems to me it’s still growing at about the same clip it has been.
Wait until after the next Fed rate hike. I think we’ll really see the fun begin. A lot of people that don’t have a clue want to blame this whole thing on the Fed and their rate increases, when there’s so much more to it. I think this next hike could be an emotional breaking point for a lot of fence sitters still in denial, scared to lose the only wealth they think they have. Look for inventory to make another good jump beginning of July.
Thanks for the northern NV numbers. I am interested because I grew up there but have lived in the Seattle area for the past five years. The Reno prices are absolutely ludicrous. I mean they have outpaced inflation and wage growth by such staggering numbers it boggles the mind. All of my friends who have owned homes for years talk giddily of how their home is “worth $750K”. First time home buyers are so completely priced out of the market it should be a crime. The California “equity locusts” came in droves, selling off San Joaquin crackerboxes and buying custom homes with hundreds of thousands left in the bank. When asked what they would do for work, a common reply was “I have some cash in the bank and time to decide”. Well, we’ll see how long it takes for the novelty to wear off and reality to set in when they find upon job hunting that median income is like low thirties. Some are already complaining that the city does not have the “amenities” they are used to. It is definitely a different lifestyle. I look for prices in Reno to take a huge crap. What is 300k right now should be like 179k within a years time. It has to. Sun Valley trailers hit 200k. For those of you not familiar with Sun Valley, it was commonly referred to as “scum valley” when growing up. There is no value there. For those who paid those prices, so sorry, you live and you learn. Put on your seatbelts.
It still is called scum valley. A bunch of trailers…Most old & on about 1/3 arce…No landscaping, just cars in the ‘front yard’
Not really much of a consipracy - NAR’s members need sales to pay for their leased Mercedes - sales have tanked big style this year and in San Diego there has been about a 30% paycut for the “average” realtor - they need sellers to drop prices to encourage buyers back into the market and get transaction volume up again so they repo man doens’t come for the Merc.
Say the downside will ‘only’ be 15-20% and you may have some people pulling the trigger sooner rather than later is they find their “dream” crackerbox house at 10% off original list - they figure that the extra 10% doesn’t matter in the long run.
Course we all suspect it’s going to be an extra 30%+ in reality.
I agree. This is completely self-serving. Realtors® are paid based on transactions (buying & selling houses). They are much more concerned about slower sales than lower prices. While high prices are nice when houses are selling, any realtor today would gladly take 6% of $450k over 0% of $500k.
It’s also self defeating. When the comps in a neighborhood are compromized by sellers lowering prices 10 - 15%, then buyers think that the market will continue to fall, and they won’t buy. Then RE will become a ‘bad investment.’
Then why would a reporter worth a damn quote such a person as a source of objective opinion? Stupid. But that is what journalism has become. Don’t get me started on Iraq and the media. Disgraceful.
DupontGuy.
“it’s a sign of how deep the crisis really is ”
Not attacking you, but you are completely wrong. Your statement is the sign of the crisis. The fact that people accept the fact of public lies, excused by the loyalty to employer, is the sign of crisis.
Highly respected? I just threw up my breakfast.
ROFL!
Another Florida Today report:
‘Washington Mutual will cut 90 jobs this summer at its regional operations center on Babcock Street in Melbourne. ‘The housing market peaked out around August of last year and has been slowing ever since,’ Vitner said. ‘Applications for mortgage refinancing have come down. The housing industry was running red-hot, and we had one of the strongest housing booms. They (Washington Mutual) are not the only mortgage company that’s been’ cutting back.’
Well respected by who? I can look past DL because he is a paid clown doing his job. But these reporters must have bolts on their necks they are so stupid.
I agree. While I think DL’s statments are boosterism of the worst kind, it’s his job. Some people clean porta-potties, others boost RE.
I am much more shocked by the Harvard Joint Center for Housing Studies report. That’s using a great trademark to sell a lousy product.
The reporters are simply serving their editors, who are serving their masters. These papers depend on real estate ads for revenue. Forget objectivity. Always follow the money.
Some buyers could lose their homes, if rates go up even half a percentage point over the next year, he warned.
well, that’s just too bad.
How about the NAR telling people they shouldn’t be getting sucicide loans with no doc? They have been pushing people into loans that they know have these issues. In most cases the people buying have little idea of what they just signed up for.
Amen. The NAR should be added as a defendant in every lawsuit against Realtors for luring buyers into this Ponzi scheme.
And isn’t it the NAR who raises such a stink whenever they talk about regulating those high-risk mortgages, saying consumers NEED them to afford homes in today’s market?
They’re screwed and now they can’t hide it anymore. I agree that the financial acumen of the main stream media is terrible, but eventually they will get it right. As I’ve said before, once the MSM begins to lose/replace revenue streams from the Real Estate industry, they will begin to tear into this whole mess.
The main stream media has droped the ball over sooooo many issues. It goes way beyond RE.
That’s because it is a brainwashing operation. How else do you explain the existence of people like Stone Phillips and Katie Couric?
I agree. I dont feel sorry for anyone losing their house when they were dumb enough to take out an adjustable rate mortgage when rates were the at their lowest point in history.
>>>>”He contends that speculators are most to blame for huge price hikes.”>>>”Some buyers could lose their homes, if rates go up even half a percentage point over the next year, he warned.”>>>In some cases prices may fall by 10 percent to 15 percent, said David Lereah, the National Association of Realtors’ chief economist.
This is just another real-estate public-relations piece masquerading as a news article. This is standard for the Sun-Sentinel. Ask a salesperson how their product is, and they say “great!” What a surprise! A few weeks ago it was an article that must have been written by the construction industry - house prices aren’t too high, concrete costs more! Any good reporter would have asked “ok, material costs for the average house went up by $5,000, why did the house have to go up $200,000?” Not in the Sun-Sentinel.
Well look at those nice full color, full page, glossy ads for new condos, new home developements and so on that builders throw in there. I would venture to guess 1/4 to 1/3 of the advertising in all of the major news papers in Florida is from home builders, condo developers, realtors and mortgage brokers…
Any good businessman will advice publishing an article that is against the interest of your biggest customers is a bad idea!
Same here in San Diego. Though the non profit local newspaper has frequent real estate articles and bubble updates. Odd coincidence
The newspaper industry is tanking thanks to the internet (including blogs) and they’re grasping at revenue. It’s a good bet that more than half of reporters own homes and it’s a good bet that the future of their careers depend in large part on revenue generated by the housing bubble ads.
It’s interesting that the internet is killing the mainstream media which has let to a lack of housing honesty while at the same time bringing us truth via blogs like this.
Unfortunately, politicians do not prosper when the prols know too much. Metaphorically, we’re probably in the early summer of the year of free speech via the Net. There will be a day, welll before most of us current bloggers are concerned solely with a 4′ x 8′ piece of land, that people can no longer post like we do now. But I’s sure as heck gonna’ make hay while this sun is shining.
“He contends that speculators are most to blame for huge price hikes.”
Although yes, that’s partly true, how about he rampant fraud, no documentation on loans, the blatant BS by REALTORS that if you don’t get in today (over the last few years I mean) that you will NEVER get in? Does the NAR have any fault in this mess?
“Some buyers could lose their homes, if rates go up even half a percentage point over the next year, he warned.”
If you took out a loan that is SO close to the edge as far as how much you can afford, whose fault is that? Yours? Your “broker’s”? Your real estate agent’s? Or should we blame it on the FED and that they should NOT raise rates because of some people’s stupid mistakes with their loans?
finally..
In some cases prices may fall by 10 percent to 15 percent, said David Lereah, the National Association of Realtors’ chief economist.
So after years of 25% plus/year runup, are you saying prices “may” fall 10-15% total? That’s it? No more? hmmm…..must be because real estate ALWAYS goes up and it’s ALWAYS a good time to buy!
Sorry for the double post here…not sure what I did.
mhaggman@miamiherald.com
I sent above an email and link to this site and asked why he calls David well respected. You might do same.
I sent him an e-mail quoting his article saying Lereah admits the top was last Aug. and then pointing out something the NAR published in Oct. 2005 that said there was no evidence of a bubble. I then challenged him to be a journalist and look into that for a real scoop. I’m not holding my breath.
Oh so now it’s the speculators that are to blame! Well if that is the case then the 40%+ of homes purchased in 2005 were “2nd homes” there is plenty of blame to go around! How is buying your primary residence with an IO loan when your intentions are to sell it and move up in a year to 3 years any less a speculation? Given that the vast majority of loans written in CA for 2005 were IO/ARM’s then they were all speculators too. How is treating your home as an ATM Machine not speculation? David, by conservative estimates over half of Americans are now commiting some form of “speculation”. If you either rent or own your home outright or are on a conservative path toward paying your home off without bleeding the equity off for improvements (like new cars for your driveway) you may be excused. The rest of us will be held after class. The only positive I see here is that someone within the NAR is bringing blogs like this to DL’s attention. This is why he has seized on the opportunity to vilify “speculators”.
Given DL’s logic if your home loses 10 to 15% (a month?) don’t blame the NAR! We had no way of knowing that Mrs. Schitzengrueber (whose husband died in the Hindenberg crash) was NOT a native Floridian. She told us she was thinking about moving down to FL “someday”. (Besides she placed a “really nice” down payment) and we figured if she had that kind of money maybe she would want a few units for the kids?
As I predicted, Lereah and the Realtors have reached a point where they’re willing to backtrack because they know the standoff is the worst thing possible for them. They wanted to keep price levels as high as possible but now they need to concede price drops so that sellers will do the same and inventory can start moving.
Exactly.
Lereah and the real estate industry don’t give a shit about anything but their own pocketbook.
”I was at another conference down here recently,” he said. “I drove around looking at property myself.”
So where is the chief economist for the national Realtor association buying?
”I am not telling,” he said.
didn’t he say the same thing recently regarding las vegas?
Do as I say (to speculators), not as I do??? What a hypocrite!
KFC could use this guy when his tenure at NAR has run its course…
Trans fats are so good for you that I’m thinking about adding more to my diet.
OT Core CPI up .3%
http://biz.yahoo.com/ap/060614/economy.html?.v=10
I wonder if the fed will take 50 basis points this time around.
Also OT:
Here’s a little tidbit about the extent of US commercial bank exposure to residential real estate prices and the vicissitudes of the the mortgage market. That exposure is substantial:
The Mortgage Reports blog, 17 April 2006, quoting a Bloomberg piece by Caroline Baum, noted author of Just What (sic) I Said http://www.amazon.com/gp/product/157660219…glance&n=283155 :
Bloomberg’s Caroline Baum penned an article earlier this week titled “Think Banks Have No Exposure to Mortgages? Think Again”.
In the piece, Ms. Baum talks about the common misconception that originating mortgage banks have nothing at risk if the mortgage defaults because they usually sell the loan off.
This is true, to an extent, she tells us. Banks do sell off their loans, but they are also a buyer of loans — just in another department.
“According to the Federal Reserve’s Flow of Funds report for the fourth quarter of 2005, mortgages accounted for 32 percent of commercial banks’ financial assets. Throw in agency- and mortgage-backed securities, and the exposure to outright and securitized mortgage loans is 44 percent.”
I interpret this to mean that even though a bank’s retail branch may originate the mortgage, it’s sister operation — the commercial branch — may be the purchaser. According to Baum, the commercial bank/branch is exposed fairly heavily, and that is the risk to the bank, and to the entire banking system.
http://21stcmb.typepad.com/the_mortgage_re…inancing_s.html
Since Mortgage Reports made this posting, somebody re-wrote the title of the piece
They dropped the reference to “banks” in the title. Now the piece is titled “No Exposure To Mortgages? Think Again.” http://www.bloomberg.com/apps/news?pid=100…=columnist_baum Good idea. No sense in spooking the herd.
It’s far from clear that the commercial banks would get a big advantage, at the expense of the rest of society, from a combination of rising mortgage rates, rising default, delinquency, and foreclosure rates, and a falling volume of mortgage-secured loans.
On the contrary, the process could acquire momentum to such an extent as to threaten capital margins.
This was posted at indexcalls.com.
I suspect that the Fed looks at “Shadow Government” figures which show inflation at 7% for the 1st quarter.
Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
http://tinyurl.com/hkkhn
test
(As I predicted, Lereah and the Realtors have reached a point where they’re willing to backtrack because they know the standoff is the worst thing possible for them.)
Agreed. The Reator interest is high sales volume not high prices. A downside panic (sell now before it’s too late!) can be as useful as an upside panic (buy now or be locked out forever!) if buyers are lined up.
But if buyers fear a crash, it is possible that they won’t buy at any price. Thus moderate declines and a soft landing is the best scenario — talk down the sellers, don’t scare the buyers. And that is what is being predicted.
Larry Littlefield,
Precisely! A stand-off is the train wreck scenario for the NAR. Sure, they would love to have higher prices and their entire “model” is predicated on exactly that. But if they can’t get higher prices they’ll take the risk that they can make it up on volume. One other tangent most of us haven’t considered is with transaction volume drying up all those newly minted realtors will go back to doing whatever it was that they used to do and will not be dues paying members any longer!
The membership dues is definitely a motivation for the NAR. Regarding the newbie realtors going back to what they did before, I think they may find that can no longer go back since they were probably replaced. Additionally, a lot of these newbie realtors were probably career malcontents begin with who couldn’t hack it in real job/career.
That’s why “it’s a good time to buy….and a good time to sell too!!”
if some is buying, some other must be selling too!!
Desidudes comment seems to have the most impact with the perma-bulls who are always buying.
The people they are buying from disagree with the outlook for that asset.
That fundamental difference of opinion is what causes markets to work.
Exactly. However, I don’t think that sellers will stop buying if they fear a crash. (if someone wants to sell me their house for $1, I’ll buy quite a few, thank you) The real problem is how to set the “correct” price that both the seller and the buyer can believe in. It doesn’t make sense to simply look at comps. One must have some sense of fundamental value.
IMHO, the “correct price” should be the price that brings the P/E ratio back to the long run average. In many markets, this means 2002 levels. So a good starting point for valuing a house is it’s 2002 price (throw in an adjustment for inflation if you’re feeling generous!).
Maybe we need an online “P/E valuation calculator” to help people see the correct price?
Also, I really think that a quick decline (maybe 45% or so) is in everyone’s best interest, because once prices decline and stabilize, then buyers and sellers will see that the adjustment is over, and they will enter the market. A moderate or slow decline prolongs the uncertainty about where prices will “end up” and will discourage buyers.
Try this: Owner’s Equivalent Rent Calculator
I built this as a quick and easy valuation calculator.
Nice calculator but you must not be from CA.
Would it be possible to increase the starting cap rate from 1-40 instead of 1-10?
Thanks.
Try this: Owner’s Equivalent Rent Calculator
I built this as a quick and easy valuation calculator.
That’s right… just pay the commission and smile ’cause that’s what brokers (all brokers, RE, stock, mortgage, whatever) want… commission coming up and commission coming down. In short brokers make you broker.
“‘We are not in a crisis but a transition,’ said Lereah. ‘I am very bullish in the long term for real estate in Florida.’”
Never mind the hurricanes. Global warming will put half of FL underwater in 20 years.
You can say adios to all the current mega-buck oceanfrontage
development.
Lereah is not only incredibly ignorant of trends in his own biz, but with this statement he demonstrates not having a clue about the extraneous circumstances which will have an impact on where people should be living.
…‘I am very bullish in the long term for real estate in Florida.’
Translation: ‘Long term’ is defined as well after David Lereah
has retired and collected his pension.
But everybody wants to live in hurricaines!
That’s why we name them! it’s because we’re so smitten and emotional about them.
Mom: Honey, kids, let’s move down to Florida and be with your “uncle” Alberto! Quick, we only have a few more days to do it.
Dad: Oh, don’t worry honey, if we miss alberto, we can just wait until “Beryl” comes to town! And then Chris, Debbie, Ernesto, Florence, Gordon, and so on! We’ll have LOTS of visitors this season!
Kids: YAY!
LOL… Before and after Katrina ,after people saw all those people fleeing Florida on the news ,with the bumper to bumper traffic ,it’s a wonder Florida had any sales from that point onward .
I keep heariing “experts” say that last August was the real estate peak, but I really thinkthat pre-Katrina was the peak. Just like 9/11 was a catalyst for the nesting craze, seeing people lose their homes, posessions and equity and then be denied insurance claims after Katrina likely snapped some people back into the reality that a house is just a place to live.
Good point HHH . After Katrina the market started to slide in Florida ,but also in many other places .
Many recent buyers, especially in extra-pricey California, financed properties with interest-only loans at adjustable rates. Some buyers could lose their homes
DUH. No SHIT Sherlock. What gave you your first clue? You are partially responsible personally for causing all of these sheeple to make such bad decisions. How about you help bail a few of them out by taking on all of their debt until you are completely bankrupted. Then see how much of a bull you can be. Oh, maybe a few people might be looking for you to ask some ‘questions’. Some of us just wised up and left that area because of the insanity. What a pompous ASSHOLE, and a flip/flopper just like John Kerry. Say whatever the wind is blowing.
The NAR is desperately setting the stage for a crash. They are trying to sell the excuse that it’s all going to be the Fed’s fault for raising rates and, as a fallback excuse, too many speculators.
Of course, in a year or two when rates are going back down, Lereah will be back on the bull. He won’t hesitate to rewrite history, he’ll say “we at the NAR warned everyone at the top that the Fed’s reckless tightening would mess everything up — and since we were proven right back in ‘06, you can trust we’re correct about the boom that’s starting up again now.”
I don’t think rates will be going down in a couple years.
LowTenant,
While I have confidence in the overall context of your statement I would be very suprised if David Lereah is part of the next leg of the “Great RE Boom” or whatever they are going to bill it as. Someone will have to go down for this and don’t be suprised if we see some “quiet reshuffling” at the state level too (particularly in more bubble prone states).
Now DL/Nar will be pushing the END-USER BOOM of …….2012.
Most of the young female realtors will be going back to the strip clubs in Florida as dancers?
need 2 leave CA,
Hey let’s not leave out all the “hunky” newly minted male realtors! I guess they have to beg for their job back at Chippendale’s or selling Sno Cones.
Looking forward to that!! LMFAO! Maybe one will give you a lap dance.
How do you think these hoes got names like Ginger-Snaps and Candy?
You’re exaggerating, right?
It will cost you 6% of the selling price of your drink.
that was good !
David Lereah sounds just like Baghdad Bob.
No, Baghdad Bob had more credibility.
very funny.
And, Baghdad Bob was much more entertaining. He could have done standup comic. Liairah is a stonefaced shrill of a sinking ship.
“Lereah pegged the end of the housing boom to August 2005.”
Wondering if this statement will come back to bite him legally. He was touting the future increases, now it’s expect declines. ” I would have never bought ,but the head of the NAR said expect a 5-7% increase.”
Wasn’t he in Florida just last moth saying that Florida will be fine, it’s places like San Diego that he’s worried about???
“Lereah pegged the end of the housing boom to August 2005.”
But wait, didn’t the NAR issue those anti-bubble marketing reports in October 2005?
Has anyone saved a copy of these anti-bubble pdf’s? I suspect the NAR will be removing them from their website sooner rather than later:
http://www.realtor.org/research.nsf/pages/anti-bubblereports
John Fountain,
Excellent work sir! Is there any way we can “archive” these for the purpose of future litigation? I agree these will fall of the radar quickly, perhaps today. I checked Portland, OR and of course their analysis is “full steam ahead”. Uh, nothing is moving and price reductions are rampant. I suppose to participate in a C/A lawsuit one would have had to purchased from August 2005 to today. I think this has real potential. I’ve been around a lot of stock analysts in my day and I’ve never heard anyone say (six months later) that you should have bailed back then! Never!
I have downloaded many of them. Other people should also have copies.
Funny you should mention Portland - I just moved here from San Diego - no, I’m not an equity locust - I’m a renter saving for after the market tanks
Saw my first “new price” sign on the way into work today - the market has stopped dead in it’s tracks here the last 2 months.
Anyone got any good links for sales/inventory stats for Portland ?
They’re copy pasting, this is hillarious…
DinOR,
I’ve talked to some of my relatives who live in Portland about the housing market and how bad the RE crash is going to be. Even though they are not prospective buyers, they insist that Portland’s stringent land-use laws make the city impervious to the bubble. Are things starting to turn there, or is the market holding steady?
“In some cases prices may fall by 10 percent to 15 percent, said David Lereah, the National Association of Realtors’ chief economist.”
….did he mean per month?
So where is the chief economist for the national Realtor association buying?
”I am not telling,” he said.
oh so he works for the NRA. now i get it
EastofWest,
Interesting, interesting point! I’ve worked in the securities arena most of my adulthood so I’m suprised I didn’t catch that! Thank you for bringing it to my attention! One of the biggest liability issues (especially where losses are concerned) is, was your advisor/analyst consistent? This alone could be more damaging to DL and the NAR than any of us may realize at this point and sets them up for a HUGE liability. Much of it will hinge on WHEN did DL realize the market had peaked. Of course he will claim that he realized just before giving the above interview, our task will be proving he knew or should have known in freaking SEPTEMBER 2005! You may have just single handedly brought down the NAR! Are there any “researchers” out there that can piece together a timeline as to how Lereah has “couched” his presentation?
But real estate agents aren’t selling securities, and thus they don’t have the regulatory and fiduciary duties to their advisees that stock brokers do, right? Good luck suing the association as a whole, it won’t work. Maybe you can prove some kind of fraud at the agent level on a case-by-case basis, but that’s a different thing…
Any of you guys interesting in lashing back at Lereah, go to his book on Amazon and post a review - some of them there are pretty good. Here’s the link to his book Why the Real Estate Boom Will Not Bust.
How come the reviews are only giving this 2 1/2 stars?
I wonder why?
I think this time will be a much harder and faster fall. With the Internet, people won’t be slowly realizing the market has slowed, as they see friends and neighbor’s homes sit longer and longer. No, they are going to read about the panic and it is going to scare them.
Real estate now operates on Internet time, and that works on the way up and the way down.
Plunge coming.
My sister is getting ready to sell her house in Sacramento. She picked it up in 2003, and has enough equity it be sure it’s priced lower than everything else in the neighboorhood.
I got one for DL and the NAR. Why doesn’t he just blame everything on TV. show “Flip That House “.
Anyway, I find it hard to believe that the NAR and DL have not know for a long time (years )that speculation was a big factor in the run up in many markets .For DL/Nar not to realize ,(until now ),that price increases, that were based on that much speculation ,along with risky loans , were a house of cards ,I find hard to believe .
Did the real estate industry really think that speculators would just keep selling to other speculators until the average cost of a home was 2 million? Didn’t it alarm the NAR that in So. California that there was only 10% that could afford the inflated prices ?
What possible basis was the ongoing appreciation predictions of 10 to 20% per year by DL/NAR based on ? The very speculation that DL/Nar thought would keep the market going ,they are now blaming for the over-shoot in prices . DL/NAR apparently didn’t understand that its the end-users that make a market ,but buying a house for actual use is a concept that seems to go over the heads of these people .
The Cheerleaders at the NAR encouraged a lot of people into financial ruin . The GREED IS GOOD concept comes at a price in the end.
a 10 to 15% drop will have millions of fb’s hyperventilating. there will be a sense of panic in the market.
people are not as stupid as DL thinks.
Yes cereal, I think your right ,panic time for the flippers/speculators ,(about 50% of recent purchases ).
IMHO no panic until 2007
“Lereah pegged the end of the housing boom to August 2005. That’s when mortgage rates crept up and speculators fled. Now, he said, home sales are declining. And the inventory of homes for sale has ballooned because stubborn sellers refuse to lower prices and buyers are ever willing to wait it out. Ultimately, he said, sellers will relent.”
What a joke. At one end, you’ll have equity-positive folks with every incentive to wait it out if they can (though they may regret it), and at the other, those who simply can’t keep up the mortgage and don’t even have a scrap of equity to attract the “We Buy Houses” sharks. Lenders sure as hell won’t be able to finance a short-sale bonanza, so do tell: who is going to be in a tough spot but with capability to “relent”?
Let’s see… Since the end of 2005, we have seen:
1) Fed hike rates 75 basis points total–plus a lock for at least another 25 this month.
2) RE hyped “post-Super bowl” rally gone MIA.
3) RE hyped “Spring rally” is now biggest ever “spring tumble”
4) Media coverage has turned 180 in its RE coverage. Housing bubble/bust stories are the norm no longer the exception.
5) NAR chief economist now conceeding RE *declines* of 10-15% !?!
Amazing. I didn’t know ‘decline’ was an approved term to use in NAR anymore.
Which of the following will occur next?
1) Phoenix inventory at 75K
2) 20% montly foreclosure increase
3) YOY price declines!
4) Lereah resigning
5) Gary Watts acquiesing “well, maybe 15% isn’t in the bag for OC 2006 after all…”
LOL……it’s a toss up