If He’s the Whore, Who’s the Pimp?

Agent Genius had the story (no longer available) last week, and today Barry Ritholtz at the Big Picture lays into the National Association of Realtors with blunt words and a big stick. In his words, David Lereah was a whore; I guess that makes the NAR the Pimp? Who are the Johns?

I find EVERYTHING out of the NAR to be suspect, tainted and generally worthless. The NAR Housing Affordability Index is essentially worthless; from 1989 – 2009, the NAR showed housing as “Unaffordable” for just one month.

Candidly, the NAR’s lack of credibility provided me, and countless others, a remarkable opportunity to define credibility by not parroting the party line spewed by Lereah. I have defined my business and writing on its honesty, candor and lack of spin – which would have been much more difficult to accomplish without the NAR foil.

The full article is at CNN/Money (no longer available) – somewhere; the original link isn’t working. Here’s Lereah in his own words –

As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the “positive spin.”

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 inline 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.

-DONNA ROSATO – Fri Dec 19 2008, 11:14