Sunday, January 11, 2009
The saga of David Lereah, the former Chief Economist for the National Association of Realtors, is getting more and more interesting and, as might be expected, more and more pathetic.
Recall that last week, in a CNN/Money report, he essentially confessed to being a paid shill for the realtors' trade group and was the subject of ridicule here and elsewhere (Barry Ritholtz was not nearly as kind as Paul Kedrosky)
This week, in a story appearing in tomorrow's Wall Street Journal, he bares even more of his soul and the details that emerge raise the "creepy" factor by at least an order of magnitude.
(Note: The image above comes courtesy of the Marin Real Estate Bubble blog and, yes, just like his Wikipedia entry, the WSJ story mentions Baghdad Bob.)
Disturbing new revelations include the following:
Seriously. You have to wonder what he held back...
Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts -- then was left to shoulder the blame when things went sour. "I was there for seven years doing everything they wanted me to," he said, looking out his window to his tree-filled yard in this Washington suburb. Mr. Lereah now works at home, trying to rebuild his career and saddled with a sagging portfolio of real-estate investments.Well, one thing that appears to make a lot more sense now than it did a week ago is why anyone in Mr. Lereah's position would subject themselves to such public scrutiny again.
During the boom years, Mr. Lereah was eager to profit himself. He snapped up condos, including two in Washington in 2003 and 2004 and one each in Tampa, Richmond, Va., Alexandria, Va., and Naples, Fla. By 2006, he says, he owned six condos worth between $150,000 and $400,000 apiece.
In April 2007, Mr. Lereah left NAR, and after working about a year on a start-up venture, took some time off for a few months. He cruised around on his 29-foot sport-fishing boat and played golf at the country club. He eventually started consulting on the real-estate market again, this time to hedge funds and Japanese companies.
Mr. Lereah now works in a small upstairs office that doubles as an exercise room. He has started his own company, Reecon Advisors, that puts out a weekly newsletter on the housing market and provides consulting services. "I feel I have such a refreshing view now because I'm not representing any interests," says Mr. Lereah.
He charges $495 annually for the newsletter, and currently has fewer than 50 paying subscribers -- a number Mr. Lereah aims to increase to 1,500 by the end of this year.
"He's starting to make some money off it now, not much," says Mrs. Lereah. "We have an expensive lifestyle: a big house, a housekeeper once a week, college tuitions, the country club."
Mrs. Lereah, a CPA who also works at home, decided the only way she and her husband could work in the same house was if they pretended they were at outside offices. They communicate during the day by email and cellphone.
It should be clear from the above - there are newsletters to sell and there are bills to pay. As Mrs. Lereah notes, "they have an expensive lifestyle", not the least of which are all those mortgage payments.
Pathetic. Even more pathetic.