"Hyper-Extended" Markets "Will Sour": NAR
Some experts are changing their tune, reports Inman News. "David Lereah, chief economist for the National Association of Realtors (said) during a presentation Thursday at the NARs' midyear meetings, he expects that some hyper-extended local real estate markets will sour within the next couple of years, while the overall housing market should remain robust for at least the next couple of years."
"'Loose lending and speculative buying – that, in my opinion, is the greatest risk that our industry faces right now,' Lereah said."
He just can't bring himself to admit the obvious. "Most local 'balloons' in home prices 'will deflate rather than pop,' though 'several local markets will pop over the next couple of years,' he said."
"For the past four years, Lereah has predicted a let-up in the galloping housing market, but he said it hasn't yet paused. 'The stars are aligned for the housing sector. I say this is the Golden Age of real estate.'"
17 Comments:
Lereah is a total fraud. This guy was touting the real estate market something fierce only a month ago on the CNBC Town Hall Meeting. Why the epiphany? Why now? What has changed? The same crap going on now has been going on for years. He must be hearing from others in the housing industry that the good times are coming to an end and now he has begun the "talk the market down into a soft landing" campaign. Greenspan approach does not work any more. This guy will get burned trying this approach.
TheGuru
I say this is the gilded Age of real estate.
A little of topic, but wanted to share this story:
As many of you may be aware they released the Base Realignment and Closure(BRAC)today...
I am in NW Florida and some of the bases around us got cut and our base gained about 2,000 military and 50 Civil Service...
From this news both at my office (I am civil service in the AF) and my wifes (DOD contractor) the first thing discussed throughout the office is how this will effect housing prices and how they will keep going up...
I just thought it was funny that the first topic discussed after something like this was housing... and how they magically think that 2,000 military personnel will be able to keep driving up home prices that have doubled in the last 3 years.... I dont think there are to many active duty military that can afford a median home price of almost $300,000...
I love how this guy Lereah is hoping for the RE balloon to deflate instead of pop. If it merely deflates than at least some Realators can keep their jobs as they sell to suckers who are seduced into buying the proverbial falling knife as the market takes 5-10 years to hit fair value. That way Realator can keep their jobs as they continue to fleece the public. If the balloon pops, well than all the Realator cocksuckers are out of a job like 15-20% of Americans.
10:24 anonymous - hey, this is a family blog!
In the future, to protect the children and the frail, please type c*cks*ckers instead.
When this mania runs its course, it might be good to come up with one of those decks of playing cards (like the Saddam ones or the Neocon ones) with the faces of all the scoundrels on them.
I don't think Lereah is the Ace of Spades, that would of course be Al Greenprint. But perhaps the Jack of Clubs.
Give Lereah a break. He is employed as Chief Cheerleader. They are obviously not looking for objective analysis.
But I guess he needs to have some credibility so he is hedging.
Considering he has a new book out it is interesting that he would comment like this-has he come into some new info? Or is he realizing
he is looking quite foolish with his cheerleading?
I just think it so sad that out of state investors are driving up prices to the point that the locals in so many regions dont have a shot at owning in their
hometown.
Anybody see any softening in the
Baltimore/D.C./Virginia area?
My feeling is the DC area is 6-12 months behind in the bubble cycle than is CA area.
This is based on reading interviews in the local news in the different areas....here in S.Cal, you don't even hear that much anymore locally. My take is that things are not going up very much (if at all)in the more expensive SoCal areas, and recent gains are restricted to the poor areas.....the least affuent are often the most desperate and worse informed.
The reports from DC area sound pretty manic.
Guys, please, stop this obscene language about Realtors. Realtors are hard working people in very competitive field. And D.Lereah of NAR is not cheerleading for Realtors, but for NAR. What is the difference? NAR makes money of REaltors fees nad from selling services and products to NAR members. NAR's misinformation goes more to its members then to the public. If, more people will believe that RE boom will last next 10 years, more of them become realtors and those who are about to quit this draining profession will stay and pay those fees and buy those expensive lock boxes.
I am Realtor and I hate the consolidation of the profession under one national association ( NAR). The cost of being in the business are very high. I dont work for commission. I am investor and keep my licenses for my own investments. I know that this is hard work, because I never succeded as an agent. Believe me when I say that.
Mike C, Chicago, renting Realtor and RE investor.
I agree with Mike C. from Chicago:
Your Realtor comments are unfair. There are many of us that are honest and ethical.
Many of also believe as you, that this is a serious bubble which is about to pop.
However I am ashamed to have David Lereah representing NAR. I prefer an unbiased opinion such as Christopher Thornberg.
To 4:15 anon,
April was up, up, up for Real Estate in the VA suburbs. I checked the local MRIS statistics. I didn't see any softening.
But, the exurbs are suffering a bit. I'm talking way out, like Culpeper County. I drove by some new developments there and everything is for rent and for resale. It seems very depressing. People are buying flippers and trying to cash them in this year or next year. It's obvious because 30% of the rentals in Loudoun and Prince William counties are brand-new homes. Almost 100% of the rentals in Culpeper are brand-new.
Daniela Deane of the Washington Post real estate section does bi-weekly chats. Up until last month, she has been gung-ho for buying. Now she is VERY cautious. She says it's a bad time for buying investment properties. She's hanging onto hers but is not buying any more because the numbers don't work. She is cautioning people against I/Os, ARMs, etc. She says real estate is for the long term and don't buy for less than a 5-year time frame.
We sold this March in Northern VA. We are going to rent. We have some family members who are very angry with us and say we are gambling. That is painful because I was brought up to believe that gambling was wrong, and I hate to think I'm doing something immoral by renting.
We found our existing house was too expensive and we weren't enjoying life at all. Buying in again and putting ourselves through mortgage stress is not appealing, especially since we've witnessed these amazing rates of appreciation. A home just like our prior home we bought in 2001 for 232K, sold in 2003 for 315K is selling for 489K. And we thought 232K was a burdensome mortgage payment at the time.
You are NOT gambling by selling your home and renting. In fact, that is probably the most fiscally conservative thing to do. You are turning paper gains into real money in the bank. As a renter, the worst thing that can happen is you miss out on some appreciation. With your cash in the bank, you're still that much farther ahead of a first-time buyer.
However, if had stayed in your house, that would be the real gamble--betting that either it would continue appreciating or that it would hold its overinflated value.
The Washington Times real estate section today has an article by a jackass called Anthony Carr. He now recommends "distant" real estate investments like south Virginia.
He has a blog called commonsenserealestate.blogspot.com. I am not going to look at it.....
I think the moon should be "distant" enough, and there is no bubble there yet. I am sure the appreciation potential must be great!
http://www.lunarfederation.com/
I agree with you soldatthepeak.
We want to live within our means and we want a safe home for our kids. If that means renting for now, fine. My husband has a good job and I will probably work again someday when the kids are grown.
But I'm still in a bit of a state of panic.
I've been considering buying something in Northern PA just to say I own real estate. Yikes. The pressure is so strong to own some real estate to feel good about yourself.
But we have cash in the bank, bonds, stocks, no debt, two cars, and all the furniture we want. So oh well.
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