Why The Real Estate Boom Will Not Bust
Say it with me: The Chief Economist for the National Association of Realtors. Wow. That is some title. That is the kind of title that warrants respect and admiration. If a person with a title like that wrote a book, I’d be inclined to read it and believe every word. In fact, I recall a book I was inclined to read a few years ago called Why The Real Estate Boom Will Not Bust—And How You Can Profit From It written by non other than the Chief Economist for the National Association of Realtors. It is funny: just a couple weeks ago I saw that book in the storage room of the office and thought, “Ha! I wonder if that guy ever admitted how off the mark he was?”
Well, lo and behold, I got my answer just two days ago. Prashant Gopal, in an article for BusinessWeek.com, wrote that David Lereah, former Chief Economist for the NAR finally admitted he was wrong. “I worked for an association promoting housing, and it was my job to represent their interests,” Lereah said. “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.” Well, this is no big surprise, but this proves again my point from my blog a few days ago where I discuss the fact that you can’t rely solely on someone else with regards to what you do with your money. You must do your own work researching what’s best for you. Because even a guy with a fancy shmancy title of Chief Economist isn’t looking out for anyone’s interests but his own, and the people he represents.
Written by Andrew Brentan
January 14th, 2009 at 1:38 pm
Funny… I did a blog post a little over a year ago about credibility of the NAR being lost for when it will be a good time to buy. http://lasvegasrealestate4u.com/2007/12/17/home-sales-to-rebound-in-2008/
As for California and the budget problems that the majority of states are going through right now….
California is a great place to visit… The bereuacratic nightmare of California is no secret and never has been for quite some time. It’s precisely why so many of us live in Nevada and Visit all of the great sites of California on our days off… but choose to claim Nevada for residency.
Don’t forget…California politicians were voted in by Californians.
I lived in Chicago for a couple of years and every year it seemed taxes had to be increased just to cover pensions. Big government is not the solution and never will be. The great economy created during the real estate bubble just paid for all the expenses and now that that (artificial) revenue stream is gone… the solution is to increase taxes to keep a bloated government going? Hardly…
In the private sector, incomes and jobs are cut in order for a business to survive when the economy takes a dive… why should it be different for the Govt?
Show me a business that raises prices during an economic downturn and I’ll show you a business that will soon be out of business.
Unfortunately… very few people watch or even care what the Govt. is doing with revenue surpluses when the economy is great … which would help explain what is happening right now with the problems caused with the loss of that same “projected” revenue.
January 15th, 2009 at 6:35 pm
WOW, that really is an eye opener for everyone. Yes, even shiny titles and “experts” can get it wrong, or purposefully give you the wrong impression by spinning it in a different light.
Mary Ann Knell-Peoria, IL Realtor’s last blog post..10 Steps to Achieving the American Dream of Home Ownership!
January 15th, 2009 at 6:59 pm
LOL, that really had me chuckling. Though I was disappointed to hear that he did, in fact, realize it would bust, but spun it so it looked like it wouldn’t to please his bosses….you’re right, just because someone has a fancy title doesn’t mean that what they are saying or HOW they are saying is correct.
January 17th, 2009 at 1:07 pm
bubble oh bubble….
January 19th, 2009 at 8:55 am
The same happens in my home country – Ukraine. Soon it will be time to buy a lot of real estate. And better you buy more of it:)
January 19th, 2009 at 2:45 pm
The public, for the most part, see all REALTORS the same as the next. But, those of us who comment and blog about this obviously are not the same. I was so tired of people agents 6 months ago, saying “NOW IS THE TIME TO BUY!” and maybe even looking down on prospects that were cautious about pulling the trigger. Not taking into consideration those prospects relationship, job stability or their cash reserves.
I am a nosey S.O.B. with my clients and customers, I would rather tell them what they need to hear and that no one else will. My attitude is I would rather be honest and get that commission in the future, along with the referrals, rather than to get a paid now, and that client resent me and not send any referrals.
This blog has a lot of great post, glad I found it, and it has my brainwaves working for future post of my own. Great work Team Aguilar!
January 19th, 2009 at 4:02 pm
Great article. We have SO many car salesmem in this business. Contrary to what most believe, I think this downtime in the real estate market is a good time for our industy. A lot of the so called professionals are getting out of real estate now. Why? Because they haven’t built the long term relationships with their customers. Referrals are drying up and no more suckers are to be found. Yes, I’m am making less money right now but I am also building a lot of customer relationships that will pay off in the long run.
A great time to buy? Who would buy that line anyway?
January 19th, 2009 at 4:09 pm
Great post and a great point to make-the experts aren’t always experts once their opinion gets bought out. Such a shame he would spin the facts around to deceive people.
Lenda Goudling-Raleigh NC Realtor’s last blog post..In Cary NC, Cooking Oil Recycling Pilot Program goes curbside!
January 19th, 2009 at 4:56 pm
I didn’t want to write this post to simply throw David Lereah under the bus, I want consumers to realize that at the end of the day they need to make sound decisions and know what they can and can’t afford. Just because some so called expert can tell you how to do something, you need to do your own research and take the time to know you feel 100% comfortable with that you are doing.
January 19th, 2009 at 5:15 pm
@Todd I agree with you 100% on building those relationships… obviously from my comments. But as for the Who would by that line Great time to buy….unfortunately First-Time home buyers, and the naive who trust “some experts”
As for throwing Lereah under the bus I never took it that way. I always take what I read from NAR, or NHBA with a grain of salt, and a big glass of water to flush it all out…I pay dues for that?
I think we have all seen a lot of the “experts” of yesterday are the morons of today. Check out BusinessWeek for a list of the Best and Worst Managers in the last week or two edition. Most are Bank and Wall Street types…not that we needed an article to tell us this
Jay Myers’s last blog post..Another reason SOME real estate agents suck
January 24th, 2009 at 2:13 pm
People seem to forget that real estate is LOCAL. What is going on in the Las Vegas real estate market differs from the Henderson TN real estate market. Right now it is a great time to buy in Las Vegas. Foreclosures have depressed prices belong their historic value (case study), there is a lot of inventory to choose from and interest rates are very low. So now you can buy a condominium and have a mortgage payment less than what it would cost for you to rent it. But obviously that won’t be the case everywhere.
January 31st, 2009 at 2:24 pm
Many economists are in the field doing research about the future of real estate market. But in most of the cases their forecasts may not tally with the actuals. Even some famous economists also make mistakes or deliberately mislead people for their own interest.
February 11th, 2009 at 12:31 am
Mrs.Margaret Safford has just echoed my exact thought. Even I was chuckling too..
March 3rd, 2010 at 5:19 am
Oh man that’s funny! Sounds like a PR stunt to me. You know that can’t be what he really thought, or at least I hope not. He must have just been saying that to keep consumer confidence. Imagine had he come out and said the bubble is going to bust sooner or later. What!? people would have lost their mind at that time, what bubble? what bust?