Don't Believe a word David Lereah Says!

I think that one of the most hilarious parts of what I do is reading what David Lereah, the chief economist for the National Association of REALTORs has to say about the housing market. I think its safe to say that he may be a shade biased given his salary is paid by people who rely on a strong real estate market to make their living! Honestly though, would you go to the guy who wrote the book "Why the Real Estate BOOM Will Not Bust" for honest, impartial advice about the real estate market? By the way if you really want the dirt on Mr. Lereah check out the blog dedicated to him here. Or if you don't have that much time on your hands just check out this article bashing Lereah.

I'm not the only one who thinks Mr. Lereah is a ridiculous public figure, just check out what the guys over at Motley Fool had to say:

"There's nothing funnier or more satisfying … than watching the National Association of Realtors (NAR) change its tune these days. The latest news release from this sunny-Jim industry group finally fesses up to its past fiction, but even when it admits the bubble's going to pop, it can't muster the courage to just come out and say it. … the NAR is full of it and will spin the numbers any way it can to keep up the pleasant fiction that all is well. … [T]he cracks began to show in subsequent remarks from NAR 'Chief Economist' David Lereah. The head outfit that ridiculed the idea of a housing bubble for years is now crying for Ben Bernanke to bring it back. … It should have been completely obvious to anyone with a loan calculator and a glance at wage increases that those months of industry bubble denials were just wishful thinking."

Now that hits the nail right on the head. The most sickening part of this whole debacle however is the power that the National Association of Realtors holds over the press. Just take a look at this hilarious chart courtesy of Kevin Depew over at Minyanville. Don't worry about reading the actual words in the articles, just focus on the headlines and the dates.

Anyone who actually follows the data knows that 2006 was a bad year for the real estate market. In fact the 4Q2006 numbers show the largest home price drop in history, 2.7% (y0y). The truth is that we are in the early stages of what looks to be a fairly broad and meaningful fall in the real estate market. Prices are off almost across the board. If you don't believe me check out these reputable sources for more reliable information on the market:

Professor Piggington - Rich Toscano's Great Analysis of the San Diego Market
The Big Picture - Check out the "Housing" Section for in depth analysis of US Housing Market.