Our favorite housing troll is at it again. Gary Watts has proffered his happy-talk feel-good delusional forecast for 2007 to the OC Register. Visit your local pharmacy (or drug-dealer) as it may be before reading his report. It prvides the additional clarity needed to see things his way. I highly recommend dropping acid chase with a fifth of vodka.
After his stunning calling it wrong defeat last year, it’s surprising that he even issues a forecast at all. He is most assuredly going to be wrong since he missed the turn. Like “Hopin, and Wishin’” David Lereah, he’ll be gracing our covers once again as the d-bag of the year award with his 7% forecast for 2007.
Not a chance.
Last Year:
My Forecast: Flat to slighly Down
Watt’s Forecast: Up 15 to 17%
Actual: Up 3.4%
(In my defense, November 2007′s numbers were at NO CHANGE so December and likely the first few months of this year are likely to be in a technical short-term oversold rebound aka dead cat bounce)
As one of our previous contributors noted, predicting local housing trends is pretty easy when viewed through recent historical data. It is when people start trying to read too much into the data that they get lost. This is where Mr. Watts finds himself (has he really found himself?). While he is trying to see all of the rich people moving into the area, he has lost sight of the consumers of most of the housing; the people already here. As one of the most expensive housing markets in the US, we have very few newcomers with substantial equity to match the current values, and this places additional emphasis on lending. OC housing lives and dies by exotic financing.
The real d-bag move Watts made last year was pulling out whole-year numbers to get closer to his median increase. This year will offer him no such soft-landing.
What does Watts’ prediction hang on?
If the inventory of homes listed for sale balloons again this spring and summer, Watts warned, the market won’t appreciate as expected. He said he was surprised by a huge increase in the number of homes being offered for sale last year, which held prices in check. Many sellers last year were expecting the same types of double-digit gains seen in recent years. “We’ll just have to see and hold our breath for the inventory numbers next spring and summer and see if that explodes again,” he said.
No need to hold your breath. Numbers courtesy of Bubble Tracking:
Note that Inventory as of the end of January is already 58% higher than last year. I am therefore dubbing this spring (in honor of last year’s “Silent Spring”) the year of the ’07 Spring Smackdown. From now on we will refer to the inventory figures as ’07 Spring Smackdown figures.
Good luck Gary, hope you have your fingers and toes crossed.
Gary Watts claims some amazing track record of predicting real estate prices going back to the ’80s. Is anyone aware of any independent verification of this record? Say, for example, by the mainstream media outlets that have repeated his claims for years?
There is no independent verification of his record.
The earliest forecasts I have even heard of were not issued until 1998. All “forecasts” prior to that were him screaming into a megaphone that California housing was overpriced in 1989, and that the turnaround was supposed to have been called in 1996. Unfortuately, the “lost years” could quite easily have been him cheerleading like he is.
However, his normal bias now is more based on what the local RE offices pay him to “pump up the troops” and keep them strong with disinformation in neat looking pdfs and word docs that agents can hand out like weimar money to potential home buyers… brochures for the “buy now or be priced out forever” group.
He makes a lot of money doing it too. If he believes his own work, he definitely smoked too much weed or dropped one too many hits and is now permanently disconnected from reality.
His actions speak louder than words: He has few listings, and spends most of his time doing speaking engagements. Look at his January ’07 schedule for an example:
Jan. 10th First Team Real Estate Anaheim
Jan 11th Commonwealth Title Anaheim
Jan. 15th Accelator Coaching Laguna Hills
Jan. 16th Fidelity Title San Diego
Jan. 17th Wachovia Laguna Niguel
Jan 18th NAHR Santa Ana
Jan. 19th United General Title Fullerton
Jan. 20th Mili Group Riverside
Jan. 22nd Southland Title Newport Bch.
Jan. 26th Stewart Title Irvine
Jan.29th Southland Title Anaheim
Jan 30th Excel-larator Training Laguna Hills
[...] mentioned was ResMae, Ownit, MLN, … hmmm… ACC laid off 3000… Sounds like the Spring Smackdown is in full [...]