David Lereah, the senior vice president and chief economist of the National Association of Realtors, “expects real estate prices to continue to fall in most U.S. markets. In areas that experienced the largest price appreciation in recent years, a correction is needed, he said, this time citing San Francisco as the best example.” (Realtors’ chief economist tells Rotarians to concentrate on local market)

10 thoughts on “Just Quotes: Et Tu David?”
  1. What do you all think? Anyone can predict a correction, but let’s take it a step further and share more specifically what we think? Severe correction? Moderate correction? No correction?
    I personally think it will be a minor correction – flat to negative 5% or so for the next 2-3 years. The boom is definitely over, but I don’t foresee any catastrophic correction in SF.
    GOOG stock on the other hand is an investment with a potential severe correction. I still think right now that real estate is a better investment than GOOG stock, but hey, I was saying that 2 years ago and look what happened.

  2. Lereah is totally two-faced. He’s been cheerleader-in-chief for the bubble the last few years, with both his books and his NAR pronouncements. Now that sales volume is drying up in most large markets, he’s desperately trying to talk down prices off the ledge, so that his members can actually afford to continue to eat.

  3. Why is San Francisco the “best example” btw? There are many markets which have boomed harder, have produced much more new product (Miami, Las Vegas, Phoenix), and lack the economic fundamentals and high salaries to support lofty valuations.
    Maybe I’m misguided, but I expect SF to deflate gently in comparison to some other markets in CA and around the US.

  4. Why SF? Because David is a cheerleader who would run down Wall Street in his underwear and claim he was a bird if it would help sell more real estate.
    So he looks at where volumes are drying up the quickest and real estate people are hurting the most and says that’s where prices will fall so that sellers will lower their prices to try to get the deals sold, AND so that inventory doesn’t build up to the point that buyers realize that they don’t need to pay anywhere near asking.

  5. Why do so many so-called “economists” foget the simple law of supply and demand. SF is just a little bit different than Vegas, Miami, and other markets regularly categorized as “overheated.” There is a national correction underway, but for SF, that generally means flat or 3-5% appreciation. The latest stats somewhat bear that out — national drop in median price, but 1.8% increase in SF….

  6. 1.8% year to date. Today’s Chronicle has a good article on foreclosures increasing due to use of “affordability mortgages.” I don’t think SF will be immune, it will just fall less and more slowly than other areas. Wait another year when the ARMs start to adjust on people.

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