REPLY
I was disappointed in the accuracy of the last forecast, so I won’t be attending any more.
Specifically, your housing outlook relies on completely ignoring exotic financing: 100% loans, no doc, stated income, IO, ARMs, negative amortization. The forecast didn’t mention that inventory is higher than the 1990’s peak, and foreclosures are at an all time high.
It was a narrow view to state that housing prices can only decline in a recession. Housing prices decline when supply is much greater than demand, which usually happens when owners cannot make their mortgage. Whether that occurs due to massive job losses or massive ARMs resetting to levels which cannot fit into a budget, doesn’t matter.
You see, the resetting of ARMs will have the same effect as job losses: millions of homeowners who cannot make their mortgage payment and are forced into foreclosure.
Another point: your forecast depends on $50 oil. You thought oil could go down because NLG went down. Those markets don’t even move in the same way. NLG went down in price because we had a mild winter and supplies built up. This cannot happen with gas. We have a limited supply, and rising global demand. It’s more likely to have $70 oil than $50 oil.
I find that the forecast is inaccurate and outdated, and we are only one month from my last attendance.
So, until you include the exotic financing, already sky-high inventory, record foreclosures, and high oil prices in your forecast , it really is not useful to read any more of them.
I found a post from sdrealtor, writing that the UCLA Anderson group missed the 1990’s price bust too. They said prices couldn’t go down.
Submitted by sdrealtor on April 3, 2006 – 9:42pm.
If most people in SD sold who would buy their houses?As for the minds at Anderson/UCLA my favorite story comes from a colleague of mine. Those brilliant minds made a presentation to his company 2 months before the last crash in the early 1990’s and said that CA was recession proof and that real estate never went down. Unfortunately, he listened to them and lost everything he had. He’s still trying to recover.
Are you sure that’s correct? My understanding is that the foreclosure rate was many multiples of the current rate back in 1990-1994 here in California.
Are you sure that’s correct? My understanding is that the foreclosure rate was many multiples of the current rate back in 1990-1994 here in California.
I agree davelj. Foreclosures are not at an all time high. I think many people have forgotten that foreclosures are a normal part of the housing market. Since the market here in San Diego has been so hot the past few years, foreclosures have been a rarity. Perhaps the “all time high” was referring to just the past couple of years?
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