- This topic has 12 replies, 6 voices, and was last updated 17 years, 5 months ago by Anonymous.
June 9, 2006 at 10:20 AM #6697CarlsbadlivingParticipant
Here you go. Article from today’s UT. Even the Harvard crowd can’t forsee a hard landing.June 9, 2006 at 10:32 AM #26522
They made the same lame argument as Thornberg: we need a recession and major job losses to see price declines. The guy is an absolute idiot – prices are already down! The article said the median went down from $518K to $503K. So he just ignores that?
What about this joker Krueger? What “strong economic growth” is he talking about? Our only growth is construction and real estate selling and lending.
Despite the lack of affordability, G.U. Krueger, a housing economist in Irvine, said sound economic fundamentals will prevent the region’s home prices from dropping steeply.
“It is really hard for me to believe that home prices will drop dramatically when economic growth is still relatively good in San Diego,” Krueger said.
END QUOTEJune 9, 2006 at 10:39 AM #26525
In general, I’m not a conspiracy theory type of person. But now I’m seeing NAR and RE developer puppet masters everywhere. Are my eyes playing tricks on me? Do they really believe this stuff?June 9, 2006 at 3:52 PM #26543balasrParticipant
I think they do. Try “The Great Crash” by Galbraith. He mentions how it is better to be wrong using the “correct methods” than being right using the “wrong” methods. BTW, there was a Harvard society which got everything completely wrong during the 1929 crash and dissolved later. Galbraith talks about this. As Galbraith wryly observes “Economics is very useful – as a source of employment for economists”. I’ll have to agree with Fleckensteins comments forwarded by Powayseller on forecasts by economists.June 9, 2006 at 10:38 PM #26564AnonymousGuest
From Ben's blog:
Harvard's JCHS policy advisory board.June 9, 2006 at 11:07 PM #26567
With the housing industry as the policy advisory board members, I’m surprised the Harvard group isn’t predicting a soft landing.
Who’s the policy advisory board for the UCLA Anderson Forecast?June 9, 2006 at 11:19 PM #26569ybcParticipant
Here is the harvard study itself. Lots of good data.
Enjoy.June 10, 2006 at 6:29 AM #26573
Thanks for the link. I browsed through this report, and found the following conclusions, which diverge from those held on this board.
The report uses data through 2003 and 2004, so it is about 1-2 years old. Why are they not using more recent data.
I think the link above is from the previous report, because the UT summarizes the adjustable loan findings from the report, and the link doesn’t have anything about adjustable loans.
Today’s online U-T front page has the headline: Equity Should Remain Stable.
Southern California’s housing boom is running out of steam, but the slowing pace of sales won’t erode the huge gains in equity that many homeowners have realized in recent years, says a report by Harvard University.
Most people will believe this Harvard study, based on the name Harvard. The few people who actually read the article will be educated to learn that economists from the California Economic Forecast and moodys’.com predict falling prices, and that the San Diego median price FELL from $518K to $505K in 7 months.
Now that I realize I just read the old version of the report…. oh well, on we go. These are the assumptions made in the 2005 Harvard report. Have fun.
1. Rising land ordinance, entitlement fees, and zoning restrictions are legitimately driving up home prices in the coastal cities.
2. Speculators have no role in causing higher prices, since they make up less than 11% of purchases, a figure too small to have an impact on prices. The data comes from Freddie Mac, which tracks how long homes are held. So, homes held for less than 2 years edged up from 16% to 20% from 1998 to 2003.
I would question how many investors even get Freddie Mac loans: don’t most investors get the 100% financing loans, or buy in bubblicious cities where mortgages exceed the conforming limit?
To get an accurate figure of speculators, you’d need to check the tax rolls and count the number of people whose addresses are not the same as the property address or who don’t claim a homestead exemption.
3. Although rents diverge from housing prices, this is a justified and not speculative divergence, because “households make housing choices based less on today’s rents and prices than on their expected direction. The continued growth in homeownership indicates that most people still believe that rents and house prices will increase enough over time to justify buying. This expectation, and not classic speculative behavior, largely accounts for the increase in the house price/income growth mismatch”.
These authors legitimize speculation and the ponzi housing scheme, because homeowners as a group could not be accused of speculation, therefore speculation does not exist. This passes for Harvard logic?
The outlook for 2005 (the link was for a 2004 study), is that appreciation will slow if interest rates slow, and can be put under pressure if interest rates rise.
Household growth will create the need for 20 million NEW homes in the next 10 years. Did you say this study was funded by builders?
Fast foward to 2006, and I’d love to ask them why builder stocks are way down. How did they overestimate the demand for new homes? We went from a need for 20 million new homes to having too many and causing price drops?
Why didn’t they mention exotic loans? Not one word in that report about 0% down, adjusting mortgages, no doc loans, teaser rates, mortgage equity withdrawal.
My guess is hese guys can be found at the beach having a big keg party with the UCLA Anderson Forecast, where you will find them with their head stuck in the sand and their butts up in the air, getting their a** kicked by a housewife.June 10, 2006 at 7:05 AM #26575
PS, I liked your imagery! Very funny.
I am also shocked that they claim homeowners buying with their fingers crossed, dependent on appreciation are not speculating.June 10, 2006 at 7:12 AM #26576
I clicked on sunsetbeachguy2’s link. It takes you to a list of the Policy Advisory Board- Member Companies. It is a who’s who of corporations who do not want to see an ugly bubble pop.June 10, 2006 at 9:08 AM #26581AnonymousGuest
Hey Poway Seller:
Sometime in the last 2 days you posted a link to the latest CNN City National bank RE valuation (over/under).
I didn't save it and can't find it would you re-post?
Thanks.June 10, 2006 at 3:26 PM #26596June 10, 2006 at 3:54 PM #26597AnonymousGuest
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