Rickety Analysis

The Union-Tribune’s latest housing editorial, Rickety Market, is so misleading that I just can’t resist taking a few shots at it. Let’s dive right in at the beginning:

We’ve been hearing from so-called experts for at least five years now that the San Diego County housing market was going to crash any day, perhaps sending the economy into recession. They were wrong, and property owners have enjoyed the greatest, most widely shared expansion of wealth in the region’s history.

And we’re off to a good start with the classic strawman offered up by stubborn housing optimists, a group that I fondly refer to as “the permabulls.” The claim is an exaggeration, for one thing — I’d really like to see a five-or-more year old example of an expert predicting that the San Diego market was going to "crash any day."

Timeline aside, this oft-utilized but completely ineffectual argument misses the point of the early warnings on housing. Some experts did start raising alarms a few years ago. The typical message, however, was that prices were reaching unsustainable levels and were likely to eventually adjust back to their fundamentals. The fact that prices went even higher before finally turning down did not render these analysts "wrong," unless they had attached a premature timeline to their predictions.

In fact, the people who were wrong were the "so-called experts" (to use the UT’s smug phraseology) who insisted that home prices would never decline. And as I recall, the UT gave the "real estate never goes down" set a lot more airtime than they gave less optimistic analysts.

read more at voiceofsandiego.org