David Lereah’s Double Speak

[powayseller]

Did anyone else catch David Lereah contradicting himself on Thursday night’s CNN home price show?

First he stated that home prices will NOT go down, except possibly in some vulnerable markets. Then he said that sellers must lower their prices to get buyers. Doesn’t lowering prices mean the home price went down????

And I would like to congratulate David for doing what I recommended on this blog several weeks ago: start a national education to help sellers get realistic. I said the NAR must educate sellers to lower their prices, so we can get transactions going again, and keep up sales. I think this was the first time David asked sellers to lower prices, and I expect to hear more along those lines. I am sure the realtors are stressing over the 30% reduction in pay. If he can get sellers to lower prices, and sales pick up to last year’s levels, everyone will be happy again.

[Bugs]

Speaking hypothetically, as if this were an either/or choice…

I’m pretty sure most realty agents would gladly trade a 30% reduction in the average commission in exchange for a 30% increase in the number of sales. A reduction in volume is felt more heavily by more agents than would be a reduction in price.

Of course, if there is a meltdown it won’t be an either/or, it’ll be both.

[powayseller]

Lereah didn’t give a seller education talk earlier this year, because he was still selling the spring bounce idea. This ended up hurting the realtors. He should have announced the soft landing would be accompanied by flat prices, instead of claiming single digit appreciation. If he had set seller expectations to reflect the changing market, perhaps sales would have declined only 5 or 10%.

I still believe sales would pick up if prices would go down. It’s a basic economics premise, that if the price is right, there is a buyer.

[privatebanker]

I watched the tail end of a “Real Estate Survival Guide” on CNBC last night that featured: Robert Shiller (Yale), the Century 21 CEO, David Lereah and some Mortgage Co. CEO. I thought it was pretty amusing to see the views of the die hards changing to a negative perspective. David Lereah actually sounded somewhat pessimistic. Of course their was some RE bull spin on a lot of statements but I just think that a lot of their expressions were very similar to the expressions that Wallstreet Exec’s were showing back in 2000.

Clearly hard times are ahead for the RE industry and have already started to take shape as we speak.

[powayseller]

That’s the show I’m commenting about. It was aired on 6/22 the first time.

[powayseller]

MoneyCNN had an article today about home sales.

“Lereah said there were some overheated markets in which prices were starting to soften. But he said such price softening would prompt more demand from home shoppers who have been waiting for opportunities to buy at more affordable prices.”

Actually, David, real estate markets collapse on the liquidity side. Inventory builds up, and prices are pressured down as sales keep dropping. That is what’s happening in the overheated markets in FL, AZ, CA. On what planet do you see more demand from shoppers? Are you really that ignorant, or do you think that lying is doing the RE industry a favor?

[yooklid]

The minute my ears heard him say “interest sensitive market” my brain translated it into “we’re gonna f*cking die! Crash and burn! arghhhhhh!”

The greater fools still believe the Emperor has clothes, but the stats tell us that more people are coming around to our way of thinking.

[sdduuuude]

“Doesn’t lowering prices mean the home price went down????”

Not necessarily. If sellers list the price well above the market value, they could lower their prices without market prices falling.

[rankandfile]

I don’t think over-pricing by a large margin is going to fly anymore, especially not with the greater amount of information available to buyers and decreasing optimism in the housing market. Besides, would realtors ethically over-price a home knowing that it is not going to move? I can understand testing the waters a bit, but they know they are not going to fool anyone worth their salt. Perhaps gross overpricing isn’t a question of ethics, but then again, maybe it is. Maybe some of the experts can list some reasons why it is not good to overprice a home?

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