Gary Watts Will Still Burn in Hell
Chuck Ponzi April 21st, 2006
Back in October of last year, I did a piece titled Gary Watts will Burn in Hell. It is still the most visited and commented on post I have made to date. I still stand by my prediction that he is going to burn in a fiery pit.
I base my belief on the following: Mr. Watts is a pumper for SoCal real estate; convincing some, and teaching others to convince people to buy SoCal real estate they cannot afford with promises of riches to come in the future.
They are ruining their own financial future and families as well. Besides, he’s a shameless trickster who has no right calling himself an economist.
I can call myself a brain surgeon but it doesn’t make it so.
He was even recently quoted from Fortune Magazine:
Will the good times last another year? Gary doesn’t hesitate. “Fifteen percent is pretty much in the bag for Orange County in 2006,” he says. “It’s impossible for prices to go down this year.” … But Watts’s favorite indicator is housing inventory. Orange County has only about a two-month supply (compared with the national average of five months).
Fact: Orange county has recently had over 10 Months’ supply reported by Jonathan Lansner at the OC register. That number has exploded in the last year and a half. Inventory, it seems, has a mind of its own. You can track it at Bubble Tracker.
Some of the commenters to my original post: (notice how recent the comments are; shows that realtors are still bumping on to my site. in MSN, Google, and Yahoo if you search Gary Watts, my post is in the top 5 consistently, and for MSN, always #1)
At Friday, April 14, 2006 12:22:12 PM, Anonymous said…
Gary — while smugly confident — has not only been “accurate” the last 14 years in a row, he has been DEAD ON within one half of one percent in his estimations. I don’t like his smugness, but I’ve made a mint following his advice.
Agreed. Unfortunately, driving a car by looking out the back window is an accident waiting to happen. The past is a terrible predictor of the future; the future is an excellent predictor of the future. If you can see the future you can do better with your career and money than real estate. Current trends and analyzing outside forces are the best way to predict the future of real-estate.
I recently reported that 17% of the job-base in OC is directly real-estate related. From my own blog:
This represents the highest number, and the highest share of total jobs occupied by real estate on record. We have often heard that the 1990’s bust of housing (was) caused by job-losses in the manufacturing sector; we are more diversified out of manufacturing since then and it doesn’t represent the same risk. Pish-posh. We are out of manufacturing and much heavier in real estate.
We are on a real-estate crack binge with only one way to go now that G-span and Bernanke are taking away the pipe.
Besides, it’s his smugness that we hate about him. All he needs now is a Prius and he’ll start polluting our city with smug.
Another Realtor writes:
At Monday, April 17, 2006 12:38:37 PM, Anonymous said…
I am an Orange County Realtor and at any given time my Buyer:Seller prospect ratio is 8-9:1.
Watts may carry on like a little twerp, but he’s right – there is no bubble in Orange County, at least anytime soon.
Wish I could go into more details, but I need to make some phone calls to my Buyer prospects!
- Handy dandy for you. Good luck with that! I have had calls from no less than 5 realtors in the past month alone pestering me and my wife, wondering when we’ll buy a house. “Keep me in mind, they keep saying”. That’s not even counting the countless leaflets, full-color inserts, and flyers we get at our home. I am sure that if you have the buyers outnumbering the sellers so much you should have no problem clearing that 13K inventory we have all by yourself. You should have to rake the money in with a backhoe.
- That’s not the news the rest of the world is telling us;
The Wealthy Escape the Housing Market (San Diego)
Seven in Ten Consumers Expect a Housing Bubble to Burst in the U.S. Over the Next 12 Months (Gallup Poll)
Real estate insiders go bearish in blogs (CNN Money)
Los Angeles Foreclosures Increase Dramatically
These are just a handful of scores of stories within the last 3 days. You can check any major bubble blog and see that the torrent of bad news about real estate is reaching a level never seen before. And you clowns still have too many customers? If it’s true, all I can ask you to do is to post your marketing strategy here so that other realtors can see how you are being so successful; I am sure that you have no problem sharing your successes with all of us to replicate as well.
As for the rest of would-be buyers; don’t be fooled. There were stock analysts pumping dead-end .com stocks the day before the companies folded. That is their job; leave the real work of prediction to the real economists. At least some of them went to jail for misleading investors; Gary will have to wait until the afterlife.
One year ago, Gary Watts predicted:
“Watts expressed his enthusiasm this way: The recent $100 increase in monthly payments – or $1,200 a year – is nothing compared to what he predicts is Orange County home-price appreciation potential: as much as $70,000 a year.”
“There’s too much emphasis on interest rates in the marketplace,” Watts said. “Who wouldn’t trade $1,200 for $70,000?”
At that time (March 2005), the median Orange County home was selling for $555K according to DataQuick.
DataQuick announced today that the median Orange County house is selling for $625K.
That is an increase of $70K in one year.
Watts prediction for 2006:
“Fifteen percent is pretty much in the bag for Orange County in 2006,” [Gary Watts] says. “It’s impossible for prices to go down this year.”
It’s hard to say what would be worse; having to listen to Gary Watts on a regular basis or having him be right while you were wrong year after year after year…
Pumper? Is that anything like a con man who pumps the paper-price up before unloading it on the sucker? Like was done with so many dot-com IPOs?
Besides, it’s his smugness that we hate about him. All he needs now is a Prius and he’ll start polluting our city with smug.
POOT! SNIFF! Aaaahhhhhhhhhh…
You must have seen that SP episode too, huh? I missed about 10 minutes in the middle, but caught the moving to SF and the people sniffing and enjoying their own stink.
John Doe:
Gary Watts was just interviewed on the OC Register RE blog.
He is starting to let humility in with his hail mary reasons why it is still different this time.
Find it here:
http://blogs.ocregister.com/la......html#more
Here is another post from the OCR blog that explains his or anyone’s uncanncy ability to forecast RE.
FUN WITH NUMBERS! How to forecast the housing market like a pro.
The real estate industry loves to predict home price appreciation (8-11% for 2006 cited in current OC Register story) and they pat themselves on the back for their Kreskin-like abilities. But predicting home appreciation is much like predicting where a cruise ship will be in an hour. If you stand on the bow and point straight ahead, you will be right most of the time.
Here’s a Step-by-step guide on how to forecast the housing market like a true real estate analyst:
Step 1: Look at yearly appreciation for the past three months as reported by DataQuick. Use this as your prediction for home sale appreciation over the next 12 months. There is no Step 2. The chart below shows how these predictions compare to Gary Watts over the past 5 years:
3 Mo. Ave. Watts Actual
2002…..12.5%……10.0%…16.8%
2003…..17.9%……15.0%…19.1%
2004…..18.2%……25.0%…24.8%
2005…..20.9%……15.0%…13.6%
2006…..13.5%……15-18%..?
As you can see, the 3 month average beat Mr. Watts 2 of the past 4 years and it looks like 2006 may provide another forecasting victory. I am clearly a FORECASTING GENIUS.
To improve my forecasts I’ve considered adding inventory, sales and other data to the analysis. But why bother? I am not in the real estate industry and have no incentive to create a better MARKETING STATISTIC.
The problem with real estate forecasts is that they tell us very little about what’s going to happen to real estate prices in the upcoming year because they are based on old data—a comparison of the median price from one year to the median price of the next year. Here’s the problem:
The market price of homes at the start of 2006 was already 5.75% higher than the 2005 median—compare $585k ave. monthly median for 2005 (per the OC Register) to Dec. 2005 median price of $621k per DataQuick. You can use other numbers if you wish, but the results are the same—the forecasters are playing with a stacked deck. Much of the predicted home appreciation is already built into the market. For example, a forecast of 8% home appreciation is really a forecast of 2.25% home appreciation if based on prices at the beginning of the year.
To illustrate the absurdity of real estate forecasts and press releases consider a scenario where prices FALL from the Dec. 2005 median of $621k to a Dec. 2006 median of $608k, with a 2006 median price of $616k. Who would be right, those who predicted a 2% drop in home prices for 2006 or those who predicted an 5% rise in home prices? I would expect to see the following reports from real estate professionals in January 2007:
MEDIAN PRICE HITS RECORD HIGH OF $616K IN 2006!
HOME PRICES APPRECIATE 5% IN 2006!
Of course, the homebuyer who purchased in Dec. 2005 and sold in Dec. 2006 would have lost 2%. But hey, people are bad at math. If we repeatedly tell them they gained 5% they will believe it.
Posted by: BubbleAnalyst at March 15, 2006 11:35 AM
unfortunately Orange County is now made up almost completely of ’smug asshole’ Gary Watts types these days. that’s sadly one of the reasons he is so popular.
maybe all will learn a little humility when this thing is over.
What is it with us whiny little GenX bitch-ass white boys? All of us woman-raised little never-got-a-broken-nose punks were brought up given whatever we want, and now the one thing mommy caint give us is causing the foot stomping, tantrum throwing siezures we were never slapped out of when we shoulda been.
I’ll bet there aint one fuckin’ bubblehead that aint a little white IT / MS bitch boy with a perfect little haircut, made more so with haircare fuckin products for that perfect I-don’t-give-a-shit look which really says give-me-what-want-or-I-just-might-cry. Throw in some student loan, car loan, and plastic payment stress and we do what we’ve always done – demand someone fix things for us.
It could just be that there is us, and there is the market – and the market is right, whether we like it or not.
NAWWWWWW!!
The market is fucked and needs to revert back to where we can buy the cribs we fuckin deserve.
Um, you just described 80% of Orange County, not just the bubbleheads. The fact that I blend in with them should be even scarier than standing out. It means that belief in the bubble would appear completely random.
Actually, no.
Most people here know prices are unsustainable (mighty change from a year ago) and most are realizing that it’s actually to their advantage if they go down. Pretty much the only people who benefit from rising prices are CEOs of major home builders, real estate agents, and loan brokers. (OK, I once again just described 80% of Orange County).
No, rising home prices only make it so that your next house is even more expensive and taxes are outrageous (even with low interest rates, it’s too bad that tax rates didn’t follow the same tragectory)
The fact that we’re selfish little whiners is more a product of our selfish whining “bong-huffing boomer” (your words, not mine) parents that taught us the pleasures of a fine whine; and not so much a product of our MTV KRIBZ culture. (although, that would be true of South Central, it’s not really the case in Laguna Niguel)
Besides, what puts the sting on it all is that we see ourselves in 5 years never attaining those 5 years older than we are. Gary Watts is just the jerk to pour the salt in our open wounds. He’s one of the bong-huffing boomers we love to hate.
The pin of the Debt Bomb has BEEN PULLED and Thrown away. Lets see how FAR and LONG these idiots and their cheerleaders can run around with a live financial grenade and NO PIN!
Like in the movie Apocalypse Now… “Stand back – THIS IS GOING to be a BIG ONE!”
That’s what I’m saying here, man, it’s our fucking PARENTS that are to blame. Those fucks. Those whiny little bastards fought in Korea and the one’s that didn’t die came home, went to work at Ford, GM, and Chrysler, started families, busted their idiotic asses, raised us genX’rs, and are now whining like little bitches about being laid off and having their pension plans terminated. Or the one’s who fought in Vietnam and didn’t die came home and IMMEDIATELY started bitching about the war, agent orange, Nixon, Kissinger, slaughtering innocent civilians, and all sorts of other selfish, useless bullshit that we GenX’rs would never deem worthy of our time away from the Xbox, MySpace, and cell phones, hair care products, and clothing stores.
The sooner they die the sooner we can crunch over their emaciated corpses and seize their kribz.
Notice the trendy word for house, home, etc:
KRIBZ.
Isn’t a crib something a baby sleeps in? Not repeat NOT where an ADULT lives?
anonymous said:
Isn’t a crib something a baby sleeps in? Not repeat NOT where an ADULT lives?
Well, I’ve never heard it used that way, but I suppose that a baby could sleep in a 4000 sq ft. mansion but I don’t understand what that has to do with the discussion.
j/k
“base my belief on the following: Mr. Watts is a pumper for SoCal real estate; convincing some, and teaching others to convince people to buy SoCal real estate they cannot afford with promises of riches to come in the future. “
A pumper? Is that like a fluffer?
“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” -Time Magazine, 1947
“Houses cost too much for the mass market. Today’s average price is around $8,000 -out of the reach for two-thirds of all buyers.” -Science Digest, 1948
“The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000.” -Business Week,1969
“You might well be suspicious of ‘common wisdom’ that tells you, ‘Don’t wait, buy now.. .continuing inflation will force home prices and rents higher and higher.’” -NEA Journal, 1970
“The median price of a home today is approaching $50,000.. .. Housing experts predict price rises in the future won’t be that great.”-Nations Business, 1977
“The era of easy profits in real estate may be drawing to a close.” – Money Magazine, 1981
“The golden-age of risk-free run-ups in home prices is gone.” – Money Magazine, 1985
“Most economists agree.. . [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980’s.” – Money Magazine, 1986
“Financial planners agree that houses will continue to be a poor investment.”
- Kiplinger’s Personal Financial Magazine, 1993
“A home is where the bad investment is.” -San Francisco Examiner, 1996
Gary Eldred,”106 Mistakes Home Buyers Make -and How You Can Avoid Them”.
This stuff is nothing new.
Gary deserves to burn in hell. The in the bag comment has rubbed me more than any other asshole pimping real estate. Would love to see a front page picture of his fat ass hanging on a meathook.
Such angry comments from so many; especially “surfer X.” Surfer X sounds so hateful at those that have applied themselves and worked hard and, oh yeah, happen to be White and own RE.
All markets correct after huge appreciation spikes; no exceptions. All the, “its different this time” is the classic stage of denial.
Surfer X: I think you have repressed stiffy for White genXers with cute haircuts…
Henry Blodget was once considered a genius by many who held a position in the NASDAQ.
Of course now he’s actually banned by law from making financial predictions.
I wonder what’s in gary’s future?
Based on the current Housing inventory levels in Orange County,CA which at the present time is triple what it was this time 1 year ago, add to that the fact that 45-55% of the homes on the market are vacant or originally purchased with a quick profit in mind as the game plan, it appears to me that the competition to sell a home is becoming very brutal. The investors that are trying to sell now while the home sits vacant and their profits are dwindling rapidly on a monthly basis from a debt carry stand point. Add to that the fact that inventory is standing 6-9 months before someone steps up to purchase or the listing is taken off the market. the one’s that have to sell are slashing prices which in turn are setting the future comparables cascading downward at a lower price point which leads me to believe that the prices are really getting ready to have a heavy downward correction in the next 6 months. Heavy inventory, long marketing times, many vacant properties with highly motivated sellers competing with each other to sell and buyers that emotionally think the market is on it’s way down. Have I missed something here? What is going to supply the neccessary fuel to sustain housing prices when so many components of the housing market all point to a major downward correction???? Can anyone offer some insight????
How does it feel paying those increasing rents? I have made $750,000 in real estate appreciation in the last 7 years, I am sure glad I did listing to a F*$&% idiot like yourself.
All I know is that if you ask any older person what their best investment was, MOST will say their home. There is always negative press in anything-that’s how the media makes money. Also everything is more expensive NOW then it was 5,10,20,30 years ago and that includes Real Estate. In the long run it will be a good investment. The people in trouble are the people who have to sell in a “bad” market”. If you are in that situation where you have to sell then you didn’t plan well. You should always have an exit strategy and money to carry you for the slow market. In Sept 2001 I put a house on the market and ended up renting it because people were scared that the market was going to tank. Lucky for me as I kept in another 1.5 and made another 50K for waiting. I have lost a ton of money in stocks so I will stick to RE!
god, who is this paranoid chuck bong-zi fool. this great defender of the press (he probably loved the l.a. times lies about arnie just prior to election day) sounds as if he writes for the l.a., er, o.c. weekly. just like that lousy weekly is all l.a. and not even remotely o.c., this bong-zi loser is obviously l.a. all the way. he is even probably ssooooo happy artie changed the name of our angels. gary watts is just some guy who has happened to have some above average luck in predicting the oc housing market. no biggie, he has predicted down-turns also. so don’t get your panties in a dither, chuck. relax. and move back to l.a. where you belong, clown!
Go ahead and disrespect Mr. Watts. You will continue to live in your blind ignorance. I’m sure none of you have a dime to your names and have contributed nothing to society. Judging by your negativity, my guess is you are liberal Democrats too. Misery loves company.
Truth is, he is brilliant and if you listen to him, you can make a lot of money investing in real estate. If not, then continue along your miserable way.
I love to look back at old posts like this. This comment and the previous 4 are now replaced with. “Oh S*#t !!! I lost $750K in real estate” these days. I am entertained.
hey Gary is not a real top producer of anything…. get the ball moving to the agents on the field. we had a real hardcore experience by taking the advice of gary and local realtors. they killed us by pricing to high and we lost the whole market. we got lucky with finding a real forcaster and a top agent at Coldwell Banker.
this guy knew the market, even showed us comments he made in the register for the past sixteen months saying things were really wrong. the real hook was quoted in Dec 31 2006 in the register that over spending and people over borrowing we going to bring the market down hard.
mac seems to know the market why not get his forcast and thoughts. he sure save us a lot of cash by selling before the real hit.
There were people pumping up dot com stocks even after the dot com bubble popped and many people bought into them because some “guru” who had been right in their prior predictions convinced them the off peak prices were the bargain of the century. We all know the story as to what happened with most of the dot com stocks.
It’s the same thing now that the real estate (and credit) bubbles have now popped. If you are foolish enough to listen to Gary and people like him, don’t say that you weren’t warned.
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