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Hell Hath Frozen Over. David Lereah Proclaims Housing not Hitting Bottom.

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May 06, 2008 – Comments (11) | RELATED TICKERS: HOV , SRS

“It’s Going to Get Worse

Economist David Lereah was once the housing market’s biggest cheerleader. Now he says the bust isn’t near over, and home prices still have a long way to fall.”

“We’re not at the bottom,” he says. “[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better.”

OMG!!!!!!!!!! David Lereah has become bearish on Housing!!!!!!! GET LONG???? ASAP!!

Daivd Lereah was one of the most adamant supporters of the housing boom. In fact, this idea that money was “stuffed in your mattress” is precisely the reason we have a negative savings rate and there is no buffer to support the continuing collapse in housing prices. But the tune is now changing as highlighted in this big story in Newsweek titled:

Quotes "There's a speculative element in home buying now." —Lereah, Reuters May 24, 2005

"Real estate is still a great investment opportunity for households. Price appreciation will continue. It may not be at 20%. It may be at 10% to 15%, or may even go down to 5%. The returns are still going to be good, but not as great as they have been. Real estate should still be extremely competitive [in terms of] return on investment." —Lereah, SmartMoney.com interview, August 12, 2005

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress." —Lereah, LATimes, August 28, 2005

"We're going to drop significantly, but it's not a balloon bursting." —Lereah, PBS NewsHour appearance, November 29, 2005

"With sales stabilizing, we should go back to positive price growth early next year" —Lereah, NAR August 2006 existing home sales press release, September 25, 2006 Publications

His book Are You Missing the Real Estate Boom?: Why Home Values and Other Real Estate Investments Will Climb Through The End of The Decade—And How to Profit From Them[4] was published in February 2005. One year later in February 2006, Lereah retitled his book

Why the Real Estate Boom Will Not Bust—And How You Can Profit from It.[5] Lereah's previous book

The Rules for Growing Rich: Making Money in the New Information Economy[6] touting investment in technology company equities was published in June 2000 at the onset of the collapse of the dot-com bubble.

Of interest:

David Lereah Watch

Is David Lereah going to Hell?

No Housing Bottom: Hell Hath Frozen Over. David Lereah Proclaims Housing not Hitting Bottom.

11 Comments – Post Your Own

#1) On May 06, 2008 at 7:19 PM, joeykid13 wrote:

Another -20 to -30% to go...at least.

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#2) On May 07, 2008 at 1:32 AM, lquadland10 (< 20) wrote:

Hey Aba, How is life treating you? This is a part from a blog I did in feb. Now one of 2 things will happen either prices will have to drop to 1998 prices Major recession with stagflation or wages for the middle class and working poor will have to rise very quickly.  Neithor one has happened and food and gas has gone into sub orbit. Wait for summer.  Is David a cfr member because he sure sounds like one.If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress." —Lereah, LATimes, August 28, 2000 We all know the best way to buy a house is to pay cash. Why GIVE a bank your hard earned money if you don't have to. Use the intress you save to fund your Roth IRA account and take a vacation.  What is his agenda now I wonder. Good Find.

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#3) On May 07, 2008 at 2:02 AM, EScroogeJr (< 20) wrote:

Once burned, twice shy...

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#4) On May 07, 2008 at 11:35 AM, abitare (33.77) wrote:

FYI  another post:

David Lereah, the most discredited economist in world history, finally admits housing crash going to get worse, expects US home values to plummet 20%

 

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#5) On May 07, 2008 at 12:44 PM, madcowmonkey (< 20) wrote:

Picture an easily muffled Beavis and Butthead giggle:)

 

What exactly does he mean that there is a speculative element? Who actually listened to this guy? 

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#6) On May 07, 2008 at 7:27 PM, bridgeboy0 (30.85) wrote:

I'm sure it doesn't matter to you but...  You realize SRS is a double-short ETF of REITs and not housing stocks, right?

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#7) On May 07, 2008 at 10:58 PM, abitare (33.77) wrote:

jk,

20-30% decline is a given depending on area.

lq,

I am doing well. Good to hear from you. David is a souless paid liar. Go to a couple of the links if you want some laughs, they can definately make fun of that shill.

EScroogeJr 

The thing is he also wrote a book in 2000 supporting the tech bubble.

madcowmonkey,

Who actually listened to this guy?

As crazy as it may seem he was the lead economist at NAR. Plus he has written 2 books!!!!! One on the dot com bubble and one on the real estate bubble.  

bridgeboy0,

Good call and very assute catch. I was running out of time, when I thru up the tickers. I should have choosen another homebuilder or regionial bank. Although Commercial Real estate/REITs are going to get hit also.   

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#8) On May 07, 2008 at 11:34 PM, lquadland10 (< 20) wrote:

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#9) On May 08, 2008 at 12:17 AM, lquadland10 (< 20) wrote:

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#10) On May 08, 2008 at 11:55 AM, madcowmonkey (< 20) wrote:

abit- From my perspective. If you were a home owner during the hay day and didn't realize a correction/downturn was going to hit, they you were being naive. Home values were increasing at astronomical rates and new ones were being put up everywhere, at least in AZ. I had bought a home in 03 and new what was going to happen in a few years. Fortunately, we timed it pretty well when we sold. It just amazes me when people thought prices could keep going. When we bought, we did a traditional/conventional 30 year fixed.

Denial- it is a powerful enemy. 

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#11) On May 20, 2008 at 5:50 PM, abitare (33.77) wrote:

madcowmonkey,

Good move, recognizing a bubble and cashing out. This a good tallent  to have. Others were not so lucky/smart, unfortunately the government like to privatize the profits, socialize the losses.

New administration might throw out a major bail out to the banks and builders, at the expense of everyone else. The bankers, NAR and builders pay the lobbiest for a reason.   

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