Former Number 1 Shill for the National Association of Realtors is Gone, But His Legacy of Horrific Predictions and Observations Live On in Infamy
Looking back, Mr. Lereah was the absolute best Contrarian Indicator on Real Estate during the blowing of the Housing Bubble: anything David encouraged "investors" to do, you only had to take the opposite view to make money.
It is now accepted by most economists and observers of Real Estate that the market top for housing was during the Summer of 2005 . . . or the same year the No. 1 Shill for the NAR released his first Real Estate book.
By 2006, Wavy Davey had to be sweating hydrochloric acid as he was looking like the planet's biggest fool in print who purported to be a Real Estate expert. At the beginning of 2006, Homebuilders were reporting increased inventory with fewer building permits issued. Not only this, housing bubble blogs began publishing one story after another about the misery in rising foreclosures, declining prices, and always, the stories about inventory exploding to highs not seen in years.
Lereah knew all this. He had his hands on the inventory reports from all around the nation . . . and he knew how inventory did not include all the new housing by builders who in early 2006 were reporting declining revenue and losses in income while unsold inventory was piling up.
Lereah also knew how median home prices from sales was being distorted by incentives, above 100% financing, sales back to a developer at the developer's top price (by canceled depositers), and pre-contract appraisals which were still being pushed by lenders . . . not market prices . . . to make appearances that all was still well in Real Estate.
Lereah was privy to all this insider business of smoke and mirror numbers reporting. He was one of the biggest cheerleaders blowing smoke out his ass. He continued to distort the data he released while saying it was untainted to make things in Real Estate look better than they really were.
David Lereah did not care for the real truth. The Truth, you see, did not sign his fat paychecks.
Enter David Lerah . . . Less Enthusiastic Illusionist and Title Changer
Eventually, the market turned so much against Lereah's ill timed book release, that a cover up of his Big Mistake had to go into effect. What to do?
While eyes were diverted, David Lereah and his publisher changed the title of his 2005 book to reflect a somewhat more somber view of Real Estate from 2006. Mind you, the same illustration of the floating house still graced the cover.
The new title in 2006 for the exact same book release of 2005 adopted a less loud claim that the boom would continue throughout the decade. Still, Lereah's new title for the same book had what was now less a confident claim . . . and more like a hopeful claim . . . the boom would not bust. Hence, the new title became: “Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today's Expanding Real Estate Market”
Way Behind the Smart Real Estate Bloggers and Message Board Posters, Lereah Begins His Backpedalling to See if He Can Go Back to Meet the Pack as it is About to Lap Him
Finally, in April 2007, Lereah seeking to cover his tracks on one of the worst calls in history with a diversionary title change added in for good measure, launched his newest, bestest, back pedaling title, “All Real Estate Is Local: What You Need to Know to Profit in Real Estate - in a Buyer's and a Seller's Market”. With this new title, Lereah actually owns up to the thought that, yeah, there might actually be something like buyer’s markets where prices are decreasing instead of there always being a seller’s market where prices always go up in Real Estate La La Land.
This title was the funniest “Whoops! There It Is” moment in non-comedy categories for the year in my book. It was David’s last coverup attempt on blown calls which he might sprinkle with sugar before he exited . . . not stage right or stage left mind you . . . but quietly out the back door of the NAR’s Ivory Tower.
I would think anyone who listened to this bloviating Phd. (Piled higher and deeper . . . definitely in Lereah’s case) will now consider that so-called “experts” in all asset bubbles have vested interests in keeping the respective bubbles alive. I hope anyone who lost money listening to Lereah’s incessant misinformation and disinformation will now use their anger as a lesson to never trust anyone in authority without doing your own due diligence on what the experts proclaim is fact.
As I will keep reminding you on this blog, any stranger who has vested interests in keeping Ponzi Schemes alive should never be listened to. Never listen to a stranger who looks at you as their next paycheck or commission check. Do your own due diligence on the biggest purchase of your life. Deal with lenders, builders, appraisers and Realtors from a position of strength by self-educating yourself.
Last, always get promises and deals in writing. Never accept the word of anyone . . . including family members, your Church elder, or the guy next door who can put you into a house at the very best price. Remember, the "experts" know only as much as you don't. Educate yourself, ask questions, and make other parties on deals put down in writing what they are telling you.
Embarrassed, Discounted, Downgraded as an Expert by All, Lereah Had to Quit or Face Making the NAR Fire Him
In Lereah’s case . . . his writings could not back away from the facts in 2007 that housing was busting. In fact, in one of his last published pieces from the NAR’s Ivory Tower, he had to ring the bell that median prices were probably coming down .07% . . . or less than 1% in 2007. This admission surely had to embarrass Mr. “Why the Real Estate Boom Will Not Bust” . . . and it wasn’t long after this confession Mr. Lereah quit his job as Chief Economist of the NAR.
Although Mr. Lereah was granted a Phd. in Economics from the University of Virginia, I am sure Thomas Jefferson would not have recognized anyone with such sycophantic desires to please their master to be worthy of a doctorate from his beloved university. President Jefferson was always a freethinker, and he called things as he saw them. He would have seen through Lereah as easy as other non-college graduates (such as myself) who sought the Truth. Jefferson would have recognized the fraud Mr. Lereah represented, and most likely, Jefferson would have expelled Lereah for breaking the University's Honor Code.
Hence, I will always think of David Lereah as a "mister" at best and the slimiest kind of analyst/lapdog prevaricator at worst.
In David’s dis-honor, we place this last image firmly in the ground as his tombstone. I wish this image would expand, but if you have a big enough screen or a mouse with a magnification feature, use it. The quotes from Lereah are worth reading for one last laugh out loud for the "Most Incompetent Economist in the Early 21st Century" claim:
Good-bye, David, we hardly knew ye. But what we knew was quite enough.
