“It looks like we are on the bottom, and we will be scraping bottom as we move along,” said David Lereah, the NAR’s chief economist. “The worst is over for existing-home sales, but I’m still troubled about new homes.”
I for one am puzzled by this conclusion that is being drawn by people like this guy. We have what in my view is a terrible number released, and this is the signal of a bottom? Why would it not be a signal that the downtrend is in full effect? I bought into one steep decline after another in my early years as a trader. I caught a few lows, but caught quite a few more daggers. I would be more than shocked to see this report signal a key low point in RE. Normally when fighting a trend, you want to at the very least, wait for it to lose its max momentum before entering. This appears to indicate an acceleration of the trend downward to me.
I believe I read that this was the steepest year over year decline since 1982. Yet, they see it as a signal that things are improving? This guy is one of the most pathetic public figures I can ever remember, politicians excluded. If things turn out poorly for housing in the next few years, I hope someone takes this guy to task on some of his comments.
This guy has called last 4 months the bottom, and now we’re scraping it, with the worst decline in 17 years. Logically, if the declines become relatively worse and worse, it’s not the bottom.
This bubble saw unprecendented speculation, lending leniency, and inflation. The worst is just getting started.
Is he “lying”, or has he just ‘drank the Kool-Aid’ and honestly believes what he says?
I actually wonder if the latter isn’t true. If you want to believe something, and surround yourself with people who believe the same thing, it can become true in your mind.
Either way, he’s wrong 🙂 Although, I do feel like the National Market is closer to it’s bottom than the San Diego market.
Well, if you walk into a Pontiac dealership, and a sales guy tells you how great Pontiacs are, that the quality gap with the Japanese cars is a thing of the past, and that Pontiacs sold today will have great resale value, etc., would you believe him?
More importantly, is the sales guy lying? Or is he just doing his job (which is to sell cars)? I think David L. is doing what he is paid to do. Intelligent consumers should know a sales pitch when they hear one, so IMO there is no issue of being truthful or not.
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