From my latest post at BlownMortgage:
There is a fascinating mea culpa from David Lereah, former chief economist with the National Association of Realtors, at CNNMoney.
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.
Or, as Capt. Willard put it in Apocalypse Now: “ The shit piled up so fast in Vietnam you needed wings to stay above it.”
It is clear that telling the truth and leaving out the spin would have served the NAR better. They could have established themselves as a trustworthy source of information. Instead they lived up to expectation as just another generator of bovine fecal matter.
In the end trust is the ONLY thing a brand or product has going for it. Lose that and nothing else matters.
Good post! It tells us that DL is “pretty bearish and have been for the past year and a half.” He left NAR on Apr 30, ’07, according to Wikipedia.
The same source tells us that Lereah’s book “The Rules for Growing Rich: Making Money in the New Information Economy touting investment in technology company equities was published in June 2000 at the onset of the collapse of the dot-com bubble.” His other classics include Why the Real Estate Boom Will Not Bust—And How You Can Profit from It.
Thanks for this post, I’ll have to keep it bookmarked so I can link it when some loony throws up on my blog.