http://www.impactre.com/seminars.html

“…there is no bubble in Orange County”

Great book for you – DOW 36,000?

Mac said it could do only one thing drop like a stone. Cost us 175k. by using the wrong agent. Killed me to think i could have taken the advise of a top performer. Nope i went with a local agent and Garys advice etc…

Mac knows his market.

Tough, no this guy is an animal, takes no crap and gets the job done!!! Seems the media should talk to him, maybe he can fix it?

He did help us, told us in June 07 the next big hit would be before Oct 07. Now look…

He is a tought s.o.b. but man is this guy dead on…

Once again, I think he was referring to me.

BTW, I changed my pseudonym to Chuck Ponzi (to avoid being harrassed by some of the people that stumble on my site).

Chuck Ponzi.

The above was a pingback from a later posting I made. You should take a look at that statement in its entirety, otherwise it is taken out of context. Automatic blogging software pingbaks sometimes take the quotes out of context… but it still applies. Gary Watts is either a liar or completely incompetent. You decide what you think. I’m actually taking a stance that he’s not an idiot, but that he knows that smoke, mirrors, and happy talk makes more money than the reality.

It is amazing the momentum your blog gained since I posted last. It is also amazing the pick-and-choose people do to derive and mold information to their favorite side. I suppose that if mathematicians and scientist in general do common folks are certainly welcome to do it.

Here are my two cents:

Business is great, there are less realtors every day, low commission realtors are dissapearing, and my investors are beginning to come out and we are helping plan their next purchases.

My clients that bought under “very creative” loan packages are well and ready to ride the wave for up to seven years and some of them 10 years so all is well in my camp.

So it goes to my original statements that if you PLAN and treat your home/real estate investment as a business plan, with all the thought and consideration(s) it deserves, it will always reward you.

Be well John and be proud of what you started.

I could not use Corona in my
calculations
this time, because real estate is dropping so fast there, I can no longer determine the prices
in this city. So, I substituted
Huntington Beach (without leased land.)
But, most areas are about the same
5.5% drop in listing prices from
the first week of June of 2006.

I expect the public will become aware of the housing downfall around December 2006 and we will
see a fast sharp decline in Jan.
and Feb. during the winter.

Remember, when a person uses a short sale from the bank,
the amount deleted from the mortgage becomes income
to the seller in that year.

So, if you get $100,000 knocked off your mortgage to be able to sell your home, you will pay income
taxes on that amount.

Many people didn’t know this in 1989 to 1995.

I expect the fall to be rapid beginning in December 2006 and
houses will fall until at least
Feb. 2008.

This fall is just beginning.

I have been a broker for 30 years
and watched the market crash of
1989. It was truly amazing
and this generation cannot appreciate that houses are like
commodities and stocks.

My analysis consists of taking
the listings from varied areas.
I use 3+2+2 houses from Lakewood,
Cypress, Cerritos, Corona and Long Beach. I take the asking prices
(that will turn into sales months down the road). The public sees
closed sales. But, my method shows
what will happen about 4 months out.

I am showing a 5.5% decrease in the price of houses listed now
since the first of June, 2006. And, the drop is gathering steam.

Look at the inventory in Corona,
CA. 2835 houses for sale! Roughly
11 months of inventory. It’s gone
mad.

The major factor in 1989 was not
the lost jobs. It was people rushing in to buy, that normally would have waited a few years.
That sucks future buyers out of
the market for years to come.
That’s the whole problem. This time
everyone has bought, that was going to buy.

It’s deja vu 1989 exactly again.
For the exact same reason, only worse. Interest only loans.

The influx into California was
no different in 1989 than it is now.

Too many people have bought now.
Those people can no longer buy
in the coming years.

Banks failed in the crash of 1989,
but now days, the banks sell off most of their paper.

When the market bottomed in 1995
there was plenty of time to buy.
Really not much happened for a couple years after.

So, when this market bottoms,
DON’T RUSH IN.

WAIT

YOU WILL HAVE TIME.

In 1995, I had the hardest time of my life selling cheap houses. No one wanted them.

When the public learns real estate is plunging, they will be too scared to buy.

The tulip bulb craze has ended.

Whatever you do, do not try to pick the bottom. You will have lots of time.

Be patient.

Good luck

Wow, I have so much to say. First, I have a question, Where can I research Gary Watts previous and current assessments/comments on the real estate market? I had only heard of him yesterday and happened to run across this blog.

I am a Real Estate Appraiser and Investor and am always interested in hearing others’ viewpoints. I have heard many arguments and taken numerous seminars over the past few years, etc., which talked about the CA and other real estate market and where it is headed.

If I had taken action based specifically on some, then I would’ve missed out on a great deal of appreciation. But, then because I didn’t take action on some advice back before this whole “boom” began, I didn’t capitalize on other opportunities. I believe one of the things that make real estate, especially in CA, such a good opportunity, is that it is not a “perfect market”, and there are many factors, involved, mostly imperfect and transitory. This type of market presents many opportunities to those with the knowledge and willingness to search and capitalize on them.

Anyway, there are many factors which sum up the real estate market and where it MAY (it is not an exact science) be headed.

Population Growth-
Population growth doesn’t add up to qualified home buyers or even a strong robust economy. You need to qualify the “type” of population growth. If half of that 3 million population growth is under 18, with little or no income, and are otherwise not qualified to purchase real estate, that will not necessarily have a direct impact on real estate or the economy. Also, you need to take into account the “net migration” patterns. This might show out-migration of 3.1 million, which would translate into 100,000 loss of population. Right now, I heard we do have a net migration loss in CA (more people moving out than moving in).

On crude/interesting way of this indication is to look up at Uhaul’s website (www.uhaul.com), and find out how much it costs to rent their largest truck from CA to another state. I know a lot of people have moved to AZ, NV and TX in the past few years, so I will use them for examples.

Los Angeles, CA to Austin, TX – $4,469
Austin, TX to Los Angeles, CA – $399

LA to Phoenix – $599
Phoenix to LA – $131

LA to Las Vegas – $554
Las Vegas to LA – $191

What does this tell you? Well, they have to pay someone (employee, driver, etc.) to return a truck to CA, and it is so expensive since there are many more trucks leaving then coming. But, when you are driving one of their trucks here, you are also doing them a favor by returning one of their trucks, therefore, it is less expensive. They only make money if the locations have trucks to rent, so they need to have them returned, eventually.

Affordability –
With the price of real estate locally outpacing income, affordability lowers until there is a point it reverses (either incomes rise, interest rates decrease, or prices decrease ). In past cycles, interest rates have generally fallen, while prices started to fall, which helped “cushion” any real estate decline (example – early 1990’s). Today, we have upward movement in interest rates with no indication that they will return to historical low levels anytime soon. This may cause a problem with affordability. Also, the money supply is tightening. The federal financial regulators have been discussing for sometime now, directives regarding limiting the number of option arm and piggyback loans there are available. It used to be that a Borrower could qualify based on the low introductory interest rate. I believe that has already changed. This all results in less money available and less people able to qualify to buy homes. Remember, typically, it isn’t the Buyer that pays for the house, it is mostly the BANK, with a small contribution by the Buyer. Lenders run most of the money supply show!

We also are already seen a rise in foreclosures. This will just add to the inventory of houses for sale, which will dilute the market, causing more downward pressure on home prices. And when Sellers are competing with the banks to sell a house, who do you think can take a bigger loss? Banks are regulated and have to have a certain amount of reserves and performing assets, or they get shutdown (Remember the S&L crisis!). Therefore, they have a greater incentive to sell their non-performing asset inventory, then typical mom and pop Seller. Inventories of available houses for sale, have been artificially low in the past recent years. To me, it is artificial, because it can change rapidly, if everyone all of sudden decided to sell their house.

Anyway, for those who can afford their monthly payment, no matter where the price of their house goes, and they plan on living there for 5 years or more and don’t plan on keep pulling money out on cash-out refi’s every year, have steady secure income, and those who don’t owe much or any money on their house, or are not in a negative cashflow position on their rental property/ies, and have enough reserves, and are not concerned with cashing out anytime soon, etc., those people will probably be fine. I personally, have sold my CA rental property, bought elsewhere in the USA, and plan on buying more in states other than CA, until I can cherry pick those great deals, that are on their way, right here in CA. They are coming, and those times present some better opportunities then the recent real estate market we have just had. I had heard once, that some people make a lot more money in a down market than in an up market, whether it be real estate or stocks. I assume these are the people that are referred to as “the smart money”, who aren’t afraid to go against the norm. Afterall, if you want to be above-average you need to act differently than the crowd.

With that all said, there really is no other place to live like CA and I don’t plan on moving anytime soon, just moving my real estate money, for the moment.

Okay, that was alot longer than I planned. Sorry, if it bores anyone.

It IS correct that the there comes a point when everyone says “Stop! It is crazy to pay that much for a house!” then prices will flatten or drop slightly. But the GENERAL direction of the market is up, so those buying the big house in the suburb’s because they need the space and plan to stay there for many years will not be affected by this flattening of prices. The ones hurt will be those in it for quick cash… and only if they purchased at the top of the market. This will affect a more modest amount of people than predicted. The bankruptcy laws are changing soon and even if people become upside-down on their houses, as long as the health of the job market is strong…people will adjust. The sky is not falling, just partly cloudy with a chance of rain.

-Phoenix realestate owner (another predicted bubble-bust)

And what are YOUR credentials. You, know you can disagree with some dignity and not be so obnoxious. Have you EVER seen Gary’s record?????? He is in the trenches. The other predictors are not. So chew cud you little brat and mind your OWN business. My guess is that YOU cannot afford a crackerbox!

Being an Xer, yes, we did lose our jobs. My husband was making great money when the industry slid down, and then completely tanked. How do you even get a call back when Mr. HR has 300 resumes on his desk? Even alphabetically it’s a lotery for an interview. After 3 years without decent employ, my husband finally completely changed directions and is working in a blue collar job that at least doesn’t “suck his soul away.” But will we buy a house? I sincerely doubt it. And I believe in home ownership. I’m just not going to own a home and have no money for living life.

Keep the conversations respectful…It’s great to read!