The Housing Chronicles Blog: David Lereah's lame mea culpa

Monday, January 5, 2009

David Lereah's lame mea culpa

Remember the ridiculously bullish David Lereah, Chief Economist for the National Association of Realtors, who penned books urging people to buy homes because nothing bad would ever happen to the real estate market? Money magazine has a brief interview with Lereah, in which he defends his tenure with the NAR by mostly pointing to his need for remaining employed. From a story:

Q. Were you wrong to be so bullish?

A. I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right in line with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren't good. I never thought the whole national real estate market would burst.

Q. The NAR's latest forecast calls for a slight increase in home prices next year. Thoughts?

A. My views are quite different now. I'm pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we'll see a very modest recovery in sales activity in 2009. But we've still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It'll take a long time to get back to the peak prices we saw in many markets.

Q. Any regrets?

A. I would not have done anything different. But I was a public spokesman writing about housing having a good future. I was wrong. I have to take responsibility for that.

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