1 year ago — “Real estate guru: Local housing market stable”

[Bugs]

Not at the rate it’s currently going.

[powayseller]

Daniel, his forecast that prices will remain flat until incomes catch up is reasonable to you? As he said, “Don’t sell your house. Prices will NOT drop.” Your comment is mind boggling! What did you think of my analyis of Thornberg’s reports?

[lamoneyguy]

Accountability for the Realtor shills is unlikely, although not impossible. Some of the key stock market “perma-bull” figures of the late 90s:

Mary Meeker, dubbed the “Queen of the Net” not for any contribution, other than duping people to dump capital into the sector. Today she is a managing director at Morgan Stanley.

Henry Blodget, gained fame after his Amazon price target of $400 came to fruition. Blodget was charged with securities fraud and is banned from the securities industry.

James Glassman, co-author of Dow 36,000 published on October 1999. Most baffling of all, Glassman is currently a columnist for Kiplinger’s Personal Finance magazine.

Kevin Hasset, co-author of Dow 36,000. Kevin is the Director of Economic Policy Studies for the American Enterprise Institute for Public Policy Research (whatever that is), and writes a column for Bloomberg. Best of all, he published another book in 2002, called Bubbleology!

Anyway, the point is, other than Blodget they are all doing just fine. And I don’t know what Blodget is up to, I’m sure he’s perfectly fine, wherever he is.

~lamoneyguy

[an]

powayseller, according to this link: http://www.housingbubblebust.com/92SoCalRecession.html , San Diego was pretty flat through the last down turn, dropping just 0-3% each year and inflation caught up. His new forecast is price will drop 10%. But for all we know, he could mean 10% every year for the next 2-3 years. Who knows exactly.

[Daniel]

I don’t think prices will remain flat. But I’m very doubtful that Thornberg actually said or meant that. You may think that he said that, but I have seen you putting words in people’s mouths so many times, that somehow I have trouble believing you. I have read many of his reports, and yes, there are some parts where he strikes a more optimistic tone, but he’s still a bear. As an analyst, he pretty much has to weigh all the possibilities (“on one hand…on the other hand”), and present scenarios. Only a fool would predict something with absolute certainty. Unfortunately, there is no shortage of them among either bulls or bears. Thornberg isn’t one of them.

BTW, Thornberg started to be a RE bear as far back as 2002-2003, only to be ridiculed by the inflating bubble afterwards. Somehow I don’t think it’s fair to pick on someone who was ahead of his time, just because you happened to learn about the bubble at the right time.

Finally, even if he DID say that prices were going to flatten out, I’m pretty confident that this outcome would be closer to the mark than your 50% haircut prediction. But it’s pointless arguing now about this. Only time will tell.

[powayseller]

Daniel, I attended Thornberg’s conference in May 2006, and studied the forcast report he handed out at that time. I studied it in detail. I met with Ryan Ratcliff after the talk, and then spoke with some of the UCLA professors for almost one hour. So my comments about him are based on actual knowledge of his forecasts.

You may be relying on soundbites. For example,Thornberg says we are in a bubble, and many people wrongly interpret that to mean he thinks prices will drop. In his conference, he said, “A bubble means an asset price is disconnected from its fundamentals. It does NOT mean a price will drop. In the case of housing, prices will NOT drop, but wages will catch up. Don’t sell your house. That would be a mistake.”

Daniel, I don’t want to rewrite my analysis of Thornberg’s forecasts, but you can do a search, as I posted it all here, as well as on ocrenter’s site. If you want to debate with me, then please tell me where I am wrong in my analysis, or which of his specific conclusions you agree with and why.

[ybc]

People don’t call economics the “dismal” science for nothing. Forecasts were never to be relied upon. Plus, reputation risk make people risk averse — that is, if you are making a wrong forecast, but are among the many who make a wrong forecast, you are fine career wise. If you make a DIFFERENT forecast and it turned out to be wrong, even if you are just a couple of years ahead, then your career might take a hit. Herd mentality has its benefits.

In addition, if you are a known figure, then you also need to be careful about the impact of what you say. Many people pointed out the importance of sentiment in driving prices up or down. A public figure would always want to be careful not to be the perceived “cause” of such panic. During a time when things are about to turn bad, the normal tendency is to be “soothing”, so you’d read a lot of “soft-landing” talk. I just view this as part of the psychology of the cycle.

Only truly independent minds speak without the burden of the above.

[barnaby33]

AsiaNautica, I can find you a link that says the earth is flat, that doesn’t make it so. Prices definitely did NOT stay flat or drop 3% a year in the last downturn.

Josh

[powayseller]

Josh is right. I think they dropped 15-25%, depending on the area. For the SD County, it was near 15%. The exact data is on the OFHEO website. The Thornberg forcast chart is clearly wrong, and what is odd, is that that is the only chart is the entire report which does not have a source!!!!!!!!!!!!!!!!

I don’t know how much clearer I can be that I know his report inside and out.

Thornberg has a PhD in Economics, but the conclusions he draws are so erroneous, that I realized that you don’t need a PhD in Econ to make forecasts. You need common sense, and I’ve got plenty of that. I e-mailed Thornberg several times, pointing out the weakness in his forecasts. I’m done helping him out. He’s a nice guy, he’s charismatic, he’s real smart, but his forecasts are lousy. I think his popularity will dwindle over the years, as economists are judged by the accuracy of their forecasts, not their charm.

[Steve Beebo]

I agree with Daniel that the price decreases in the next 5 years will be much, much closer to 0% than to 50%.

Right now, I could spend a couple of hours of research time and present you with 50 specific properties that have dropped by quite a bit over the past 12 months, (10%+), but I could also present you with 50 properties that have not gone down at all over the past 12 months, and another 50 properties that have had sizable (over 15%) price increases over the past 24 months.

The bottom line is: for most areas, (downtown condos and some newer tracts excluded), prices have changed very little, up or down, in the past year. And we really don’t know how much prices will drop over the next 4-5 years. There are too many factors involved. The only things I know for sure is that there is a lot of inventory right now, which will keep some downward pressure on prices in the next year. And also, there is very little sales activity right now, which will keep inventories high. Most potential buyers seem to be sitting on the sidelines until they see what happens in the housing market.

[powayseller]

Steve, would you provide a list of homes that sold in the last month at the 2005 summer comps? I find your statement very surprising, and definitely requiring some data to be backed up. The median in San Diego is down 1% over the last year.

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