It’s Going to Get Worse

Economist David Lereah was once the housing market\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s biggest cheerleader. Now he says the bust isn\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t near over, and home prices still have a long way to fall.

Whenever a boom goes bust, there\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s always a round of finger pointing and blame assigning, of people asking \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"Why didn\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t the experts see this coming?\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" So as the housing bust has morphed from a cyclical downturn into a full-blown crisis, there\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s been no shortage of culprits. Some blame Alan Greenspan for badly orchestrated monetary policy, a charge against which he\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s lately been fighting back. Some blame the subprime lenders and the brokers who found clients for them; together they underwrote many of the loans that are now causing so many foreclosures and so much pain.

And at least a few observers include an industry economist in this lineup: David Lereah, the former chief forecaster for the National Association of Realtors, whose irrational exuberance for real estate has led to some measure of ridicule.

Let me confess at the start: I spoke with Lereah frequently during the boom, and I always found him to be a smart, thoughtful observer. Sure, his assessment of the real estate market was consistently upbeat, but that\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s hardly surprising given that he served as chief spokesman for a trade organization that believes it’s always a good time to buy a home. And the truth is I feel a little sorry for the teasing he has absorbed since the housing bubble burst. Yes, he did publish a book in 2006 with the unfortunate title \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"Why the Real Estate Boom Will Not Bust\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"—but he didn\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t pick the title, the same way columnists like me aren\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t always thrilled by the headlines our editors put atop our stories. And while I thought it was funny when my colleague Daniel Gross and others compared Lereah to Baghdad Bob, the Iraqi information minister who repeatedly announced his army\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s military successes even as U.S. tanks were overtaking the capital, I can\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t help feeling bad for him. But if you judge from the blogosphere, I\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'m in the minority with my sympathy.

It\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s been more than a year since Lereah left NAR, so I called this week to check in. It turns out he has recently set up a new firm called Reecon Advisors, which is advising Wall Street firms and institutional investors about the real estate market. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"Wall Street has an intense interest in [this], because they\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'re looking for when is the recovery going to come, and at what point does the cycle turn,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" Lereah told me. His answer: not yet. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"We\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'re not at the bottom,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" he says. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"[People] want it to be near the bottom, but we\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s still supply out there in abundance … This thing is going to get worse before it gets better.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" Lereah says that the industry may begin to see a slight uptick in sales later this summer, which could signal the start of the recovery. Home prices, however, will continue to fall. According to the latest numbers from the Case-Shiller index, the average U.S. home has lost around 15 percent of its value since the market\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s peak. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"We\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'re probably going to end up with a 20 percent [decline], but if I\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'m wrong it will be even more than that,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" he says.

That\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s quite a turnabout from the view he articulated in his book, first published in 2005. There he argued that the solid economy, strong demographics (including immigration and aging boomers), and a lean supply of homes should lead prices to continue rising for years to come. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"Today\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s real estate market is the result of rational decision making based on supply and demand conditions,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" he wrote. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"With today\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s economy, home owners are in no danger of experiencing a widespread fallout of home prices.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"

Oops. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"You knew there were a couple of [regional] balloons out there, and [I] said you could have a couple of these balloons pop,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" Lereah says now. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"But I didn\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t think this would turn into an all-out bursting of a balloon for the whole nation.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" He, like other prognosticators (including Greenspan), points to his lack of understanding of the profound effects that subprime lending was having on housing markets. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"[I] just didn\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t realize the scope, the extent, the magnitude of the loose underwriting—not looking at incomes and wages, just providing so many mortgage loans based on [expected] future price appreciation rather than the creditworthiness of the borrower,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" Lereah says. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"That got so out of hand, and none of us realized the magnitude of it until it was too late.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"

Now, as the market continues to worsen, Lereah is skeptical of many of the rescue plans being touted in the media. He was particularly unimpressed by Hillary Clinton\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s proposal for a 90-day moratorium on foreclosures. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"That was, to me, just wacky. Don\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'t try to control the market—that\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s not going to do anybody any good.\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"

Lereah does think that the House bill co-sponsored by Barney Frank—which was recently passed by the House Financial Services Committee and now awaits a full House vote, is the right idea. Frank\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s bill would serve to modernize the Federal Housing Administration (FHA) by increasing loan limits in high-cost areas like California and New York, authorizing zero-down and low-down payment loans for more homebuyers, and generally improving access to mortgages for lower-income folks who have faced bigger hurdles to a home loan since the credit crunch began last fall.

\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"Every time you have something like this you overreact the other way,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" Lereah says. He sees Frank\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s efforts to boost the FHA\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s role as a solid countermeasure that may help the market. While he was an economist at NAR, Lereah was also a real estate investor himself, at one point owning 10 condominiums from Virginia to Florida, which he rented out. Today he still owns seven of them, and aside from one that\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s languishing unrented, the other six are still making money, he says. So even if his forecasting record is mixed, his in-the-trenches investment record appears more solid.

At his new firm he\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s also looking to cash in on the weak market. He\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s currently talking with several Wall Street folks about setting up an investment fund that would buy pools of distressed real estate, which it would convert into rentals. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\"We think there are some very good acquisitions that can be made,\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\" he says.

So even if this slump remains far from over, David Lereah still thinks it may be a smart time to buy.

美国房地产市场每况愈下

经济学家David Lereah曾经是房地产市场最大的鼓吹者。现在他声称房屋市场暂时不会破产，房价下跌仍然需要很长的时间。

每当一次热潮化为泡沫，总会有一轮指责和问罪，人们会说：“为什么专家没有预见到它的到来？”于是，当房屋市场的破产从周期性衰退转变为一场彻底崩溃的危机，这里不乏一些罪魁祸首。一些人责怪格林斯潘对货币政策的失败操纵，而他最近正忙于回击一项对他的指责。一些人埋怨为他们寻找到客户的次级放款人和经纪人，这使他们背负了太多的贷款，而这些贷款现在致使众多房屋抵押品难以赎回，其付出的代价十分惨痛。（注：买房者未能如期还贷，则银行取消抵押品赎回权）

而且至少有一些观察家，还包括一个产业经济学家在内，也在这个队伍里：大卫lereah ，这位全国房地产经纪人协会的前首席预测官，因为其缺乏理性的盲目预测，也招致了一些嘲笑。

那么就让我从头说起：当房地产业繁荣时我与lereah经常交流，我总是发现他是一个睿智的，深思熟虑的观察家，当然，他对房地产市场的评价一贯是乐观的，这实在不足为奇，因为他是某商业组织的首席发言人，而此组织一直主张现在正是买房子的绝佳时机。但真相是，我觉得有点抱歉，因为房地产泡沫破灭后我一直取笑他的固执。是的，他在2006年确实出版过一本书，还不幸取名为：“为什么房地产热潮将不会衰退”——但其实标题并非是他取的，就像我这样的专栏作家也并不总是喜欢我们编辑为我文章盖的大标题。同时，每当我的同事Daniel Gross和其他一些人将lereah比作巴格达Bob，那个甚至当美军坦克占领其首都时，还一再声称他的军队是胜利的伊拉克新闻部长时，我还是觉得很可笑，但又不禁为他感到悲伤。如果你从我的博客文章中判断，我还是少数对他持有同情态度的人。
        Lereah 离开NAR已经1年多了，我这周打电话核实了一下，他最近成立了一个名为Reecon Advisors的新公司，主要是为华尔街房地产市场相关公司和投资者提供咨询。lereah告诉我，“华尔街对此很感兴趣，因为他们期待何时房地产市场会复苏，何时局面能够扭转过来”。他的答案是：还没到时候。“房地产状况还没有达到人们期望的最低谷，其主要指标仍然非常差，房屋的销售状况还很恶劣，抵押贷款申请很少，供应远远大于需求，整个形势在好转之前还会变得更糟。

Lereah 说，今年夏天晚些时候该行业的销售上可能开始会看到有轻微的好转，这有可能是开始复苏的信号，但是房价将继续下降。根据Case-Shiller的最新数据显示，市场高峰期过后，美国的房价总体贬值了15 ％左右。他说，“这个数据很可能最终降到20 ％，但如果我推测有偏差的话，可能不止于此”。

这与他在2005年首印的书中所阐述的观点有不少转变，在这本书中他认为，稳固的经济基础，有力的人口数字支持（包括移民和老龄化高潮），以及很少的房屋供应会导致房价在未来几年会继续攀升。当时他写道，“现在的房地产市场是基于供需状况下理性决策的后果，现今的经济条件下，房屋所有者不会面临房价大范围大幅下跌的风险”。

现在lereah改口说，“哎呀，你知道局部地区会出现一些气球（注：比喻意料中会出现的麻烦），而且其中的一些可能会爆炸，但我不曾想到整个国家的这个气球会全部爆裂”。他像其他预言者一样（包括格林斯潘），坦承他对次级贷款于房屋市场的深刻影响缺乏认识。lereah说，“我只是没有意识到松散的承保体制的程度和规模――没有考虑到收入和工资，只是在预期价格会增值的基础上假设会有足够多的按揭贷款，而忽视了借款人偿还贷款的安全性，于是形势逐渐失控，当我们认识到它的严重性时，为时已晚”。

随着当前市场形势的继续恶化，lereah对媒体宣扬的很多援救计划表示怀疑。他对希拉里提出的赎回期延缓90天的对策并不感冒，“在我看来，这种方法简直疯狂，不要试图去干预市场——这么做对任何人都没有好处”。

Lereah认为由Barney Frank联合倡议的房屋草案确实是个不错的解决办法——这个草案最近已由房屋金融服务委员会通过，目前正等待全议会投票表决。Frank的草案旨在通过在加州和纽约等高费用的地区增加贷款限额，为更多的买房者批准零首期和低首期贷款，普遍提高自去年秋天信贷紧缩以来一直面临着更大房贷障碍的低收入群体获得抵押贷款的机会，最终实现联邦住房管理局(FHA) 的现代化。 
       Lereah说，“每次遇到这样的状况时，人们的反应便过于强烈。”他认为，Frank努力增强FHA职能是一项有力的对策，可能帮助到市场。在NAR时，他不仅是一位经济学家，也是一位房地产投资者，曾一度在维吉尼亚州和佛罗里达州等地购置10座公寓，全都用以出租。他说，现在，他仍然拥有其中的7座，除了其中一座未能出租，其余6座仍在赚钱。因此，即使他的预测时准时差，但他在投资实战中的纪录却相当不错。

他的新公司也正在寻找在这个疲软的市场中继续赚钱的机会。他目前在跟几个华尔街伙伴商谈设立一个投资基金，用于购买那些虽令人头痛但仍可转变为可供出租的房产。他说，“我们认为可以作出一些很好的收购”。

所以即使不景气的现状离结束还很远，David Lereah仍然认为这可能是买房的绝佳时机。