Lereah on Florida Housing Market

The housing market’s chief cheerleader has a surprisingly stark message for Florida Realtors: 2006 is going to be a tough year. The region’s real estate economy must recover from a hangover wrought by a spasm of speculation and easy money, David Lereah, told Realtors at a West Palm Beach hotel today.”

“‘We’re in a cleansing mode right now,’ Lereah told about 400 people. ‘It’s gonna hurt.’”

“While Lereah compared the housing boom’s excesses to the stock market bubble of 2000, he doesn’t foresee a Nasdaq-like crash for home prices. Rather, he calls real estate ‘the new gold standard’ for safety-minded investors and predicts a period of sluggish activity followed by a return to a stronger housing market next year.”

“‘If you have a healthy local economy, it’s almost impossible to have a bubble burst,’ he said.” “For the near future, though, home sellers will have to contend with a glut of properties for sale and reduced interest from buyers. Lereah called the slowdown healthy: ‘Prices got a little too high. We got ahead of ourselves. We needed to catch our breath.’”

“Lereah dismissed widespread concerns about the lack of affordable homes in Palm Beach County and the Treasure Coast. Lereah said, that number isn’t so steep compared to other parts of the country such as New York and northern New Jersey.”

“While Lereah is bullish on the long-term future of Florida’s housing market, he warned that hurricanes and soaring insurance premiums pose threats. ‘If we have another bad hurricane season,’ he said, ‘all bets are off.’”

[Courtesy of The Housing Bubble Blog]