WatchSAN JOSE, Calif. (KGO) -- Here's the best news you've heard in years about Bay Area real estate. A new report offers not just a glimmer of hope in California's housing market, but predicts a roaring comeback over the next six years. We could be poised for a dramatic comeback.
Read more:
http://abclocal.go.com/kgo/story?section=news/business&id=8422604
Perhaps we can revisit this article a year or two from now.
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Monterey, CA
HAHAHAHAHAHAHAHAHAHAHAHAHA (revisit that in a couple years)
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Anonymousone's website
joshuatrio says
lol...
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Anonymousone's website
Perhaps they mean roaring tuition fee hikes.
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What exactly is this "news" based on? I read it and its not like what was mentioned as the catalyst for this "good news" was anything new" Lower interest rates with the hopeful guesstimate that somehow new jobs would come about someday and lo and behold prices would rise! Yipeee! So in other words the whole thing is based entirely on nothing and fluff. Doesn't take an economist to figure that out either.
Lastly... WHY oh why does every single article that mentions high prices indicate that this is such a good thing?
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edvard2 says
Good question!!!
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San Jose, CA
Last frontier for banks: Promise to cash short universities donation for presenting positive outlook on housing. LOL.
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Baltimore, MD
If prices drop, isn't that also a roaring come back???
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zzyzzx says
The Return of the Come Back
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44 male
Egg Harbor City, NJ
It funny, I always thought sales drove prices up. So if 3 people want the same house, they out bid each other and thus force the price of the house up. The increase price from the sale goes on record and the next house that is selling in the area use the sold house with the increase price as a comparable, thus getting more for the next house sold and so on. But according the geniuses economist at UCLA, sales will remain flat all through this price recovery. So you have no increased in sales volume but prices will magically raise 50% over the next five year. How does this work exactly?
From what I understand about housing economics, demand drives up prices. Take a place like Watford City, North Dakota with a population of about 1,400 and falling in recent years. Add a huge oil strike, pay top dollar for 30,000 workers and the town (and surrounding towns) floods with people to fill the demand for workers. The workers are getting very high paychecks, there not enough housing and apartments to fill the demand. Hmm I wonder what happens the the cost of housing in the area, I can't imagine.
Now it there another wave of high tech jobs coming or there's a oil strike in California UCLA knows about but isn't telling anyone yet. I can't see it. Not a 50% increase in prices in 5 years.
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Last year this same forecast said home prices woud start rising in 2012 and that a full recovery (pre-crash prices) would happen by 2016. Now they say, ummm, wait. rise won't start until 2013 and in 2017 we still won't be at pre-crash prices... I respect the economists at Anderson but it's clear this "forecast" is subject to change...
http://lansner.ocregister.com/2010/10/27/ucla-o-c-home-prices-to-surge-49/86028/
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I wouldn't say that entire UCLA is entire behind this random opinion. I think someone is trying very hard to dump their bad gambles while they still can.
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Watch Ron Paul talks about housing and student loans:
http://youtu.be/D2eq2nZ6J6g
It baffles me why there are still people who are against Ron Paul.
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Anonymousone says
Most of his goals would never fly with Congress.
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Murrieta, CA
HA HAHAHAHAHA LOL! UCLA economists are owned by the Banksters. They work for their masters. They know what side their bread is buttered on ( speaking fees/grants) What have they been right about in the last decade anyway. They truely are part of the problem. and this peice of filth is a good example. Their Data is all BS!!!
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zzyzzx says
Yeah sure,it is comeback for buyers.
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Anonymousone says
Why do I care about predictions on either side? No thanks, I'll stick to my own analysis. So far it has turned out better then Larry Yun's analysis. LOL.
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Bellingham, WA
"why there are still people who are against Ron Paul."
LOL. Libertarianism is one of the stupider ideologies floating around.
I think the current situation is fucked but libertarian solutions would just entrench the imbalances further.
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Bellingham Bill says
So you admit the current situation is bad but you criticized another that's not even tried? Why not just say let's keep the current one.
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Anonymousone says
Bellingham Bill says
Libertarianism has been tried. What do you think feudalism was?
Agree that libertarianism is a waste of time. It would make the current problems worse.
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Los Angeles, CA
Here is the UCLA(Pravda) RE forecast from 2006 (peak bubble)
http://www.anderson.ucla.edu/x15140.xml
The California Forecast, by economist Ryan Ratcliff, takes note of the state’s slowing real estate markets. Ratcliff concludes that the real estate slowdown will lead to a flat housing market and a slower economy.
“We do not predict a recession, nor do we predict a substantial decline in average nominal home prices,” Ratcliff says. “This forecast it based on two arguments. There is not enough vulnerability in the usual sources of employment loss to create a recession, and the historical record suggests that average home prices do not usually fall without this kind of job loss.”
As in the national forecast, Ratcliff is acknowledging declines in real estate and associated job losses in real estate-sensitive sectors. But absent job losses in manufacturing or other sectors, there will be no recession, he says.
Ratcliff does note the possibility of some downside risk to the forecast, however, due to the potential impact of exotic real estate financing and uncertainties about the effects of home prices on consumption.
>>>UCLA=FAIL
How can they be respected when they are merely cheerleaders like Yun/Lereah???? Mish has more credibilty.
Do they really just look at the last couple years/data points and trend that line in same direction? Thats what we all do. Even animals do this. The cat knows when u wake up and when u come home - but he is 'upset' when u sleep in on saturday (you blew up the trend! how could he know?!?!) dummies.
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The best way to have a report noticed is to go against the popular majority.
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San Leandro, CA
from the article; "The same panel of economists who warned the California housing bubble was going to burst is now predicting homes prices are ready to rebound."
It appears the panel did not have enough credibility to save millions of families from becoming homeless.
Can we learn more about this panel and there findings ? Past and future ? If not, maybe this is just another ad for banks.
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The analysis is more important than the prediction. Based on my understanding, there is one favorable case to demand in housing --- jobs, consumer confidence, economic growth, which is all tied together.
So what is the catalyst to turn this around? New home construction.
In 2001-2009, new homes were built at an annual rate of about 2M a year. New homes built new towns with new roads, infrastructure, which requires new starbucks, bestbuys, restaurants, and new professional services market. It fed a lot direct and indirect job growth even though the stock market struggled post dot-com.
Unfortunately, those homes build created excess supplies, construction stopped and worst yet, the restaurants that were opened to support the new towns are mostly struggling, Corporations which grew on an expanded customer base now have to expand by taking customers from their competitors. But first they must shrink their expense and headcount. 15 million jobs were lost between 2008-mid 2010.
New home construction is true GDP stimulus, so until new homes built normalizes, the jobs lost will not come back.
The caveat is the last three years, construction was at an annual rate of 500K, so eventually construction activity will pick up and meaningful job creation and cycle will resume. Rental rates have been going up and vacancy rates have gone down consistently for the last 18 months. Excess supplies are being absorbed quickly and another 18 months of vacancy rate decline will surely push more construction activity.
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Media has been claiming a recovery every few month, upon donations arriving from NAR. Yet bubble is deflating, government is trying to prevent it kicking the can down the road. Real market correction is inevitable.
Smart money is long out and is elsewhere. Housing is just a nightmare of bad debt. I hear Japan had the same bubble problem at some point, but I don't know much about it.
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theLandlord says
Yes, residential investment is generally considered a leading indicator for the economy.
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Anonymousone says
He's the anti-Civil-Rights-Act Republican. He's an anti-reproductive-rights Republican. He's a gay-demonizing Republican. He's an anti-public education Republican and an anti-Social Security Republican. He's the John Birch Society's favorite congressman. And he's a booster of the Constitution Party, which has a Christian Reconstructionist platform. So, if you're a member of the anti-woman, anti-gay, anti-black, anti-senior-citizen, anti-equality, anti-education, pro-communist-witch-hunt wing of the progressive movement, I can see how he'd be your guy.
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I voted for him once, and if he is the only way out from under Obama's rule by decreee, then I shall vote for him again.
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Buster says
while I am not anti- anything you listed, my economic liberties and my civil liberties mean more to me than anything on your list combined. Also, I don't beleive Ron Paul is anti-equality, he's a staunch Contitution defender, more so than any other candidates or acting Prez.
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lexa says
You don't even know what it means to defend the constitution. And you can't spell it either. Seriously, if I had a dollar for every person I know who talks about the constitution who has never studied constitutional law, I'd be very rich. If they had actually studied con law, they'd figure out how stupid and unprincipled it is.
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corntrollio says
Amen.
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lexa says
Ron Paul is most definitely anti gay and anti all of the above. If you are so into civil liberties and equality, this is one area where 'sort of kinda for some' doesn't fly. You are either FOR civil equality and liberty for all or you automatically fall into the anti column. This is one of those rare all or nothing issues. You either are or you are not. Both you and RP fall into the not column.
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San Francisco, CA
I agree that this is more (coordinated?) hype from those who would benefit from a return to an inflating RE market. In all the cheerleading articles, you never see anything about the recovery of economic fundamentals. So what is the purported genesis of this impending RE comeback?
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UCLA experts don't buy recession
In a contrarian view, the Anderson Forecast focuses on strength in industry and spending.
March 11, 2008|Peter Y. Hong | Times Staff Writer
Brushing aside conventional wisdom, UCLA economists say California and the nation will survive the housing slump and job losses without plunging into recession -- although it will still be miserable for many Americans.
"We are holding firm: no recession this time," UCLA Anderson Forecast Director Edward Leamer said in a report being released today.
http://articles.latimes.com/2008/mar/11/business/fi-ucla11
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joshuatrio says
Their model is busted...
http://bayarearealestatetrends.com/
September, 2009: UCLA: Home prices have hit bottom
“Now that prices have adjusted to levels which make existing homes more affordable, sales are increasing and conditions are becoming ripe for new residential construction,” wrote Jerry Nickelsburg, a senior economist with the Anderson Forecast and the author of the California economic outlook.
June, 2009: Housing recovery set to begin, forecast says
“Our employment forecast suggests that it will be late in 2009 before prices are tempting enough and supply is low enough for the market to stabilize. When it does, the contraction in residential construction will, finally, after more than three years, cease to be a drag on the California economy.”
June, 2009: UCLA: Hard times to last another year
After retreating to 2002 levels, home prices are about to start going back up, with buyers coming off the sidelines at the mid-point to latter part of 2009. The surplus of homes for sale has evaporated.
October, 2008: UCLA sees mild rebound for O.C. economy in 2009
“We are not forecasting a freeze up in the financial markets,” Nickelsburg said.
June, 2007: UCLA Anderson Forecast: U.S. Economy Not In A Recession, “But It Is Certainly Close.”
In his national report, UCLA Anderson Forecast Senior Economist David Shulman notes that if the current (and continuing) forecast is close to the mark, then the period from second quarter 2006 through first quarter 2008 will mark an historically anomalous long period of below trend growth. But he remains consistent with the story the Forecast has been telling for some time, that a recession is not imminent for the U.S. economy.
June, 2006: No Statewide or National Recession Seen
Leamer, who does not expect real estate prices to fall significantly, notes that sales volume is what typically drops, and drops more precipitously than prices, as the price cycle lags behind the volume cycle. The number of homes sold will drop as owners decline to sell in a weak housing market. Prices, however, should hold.
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San Jose, CA
Now we know for sure who is “The Master”.
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So Cal is peppered with REI interest.
They sold their soul to the devil decades ago.
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Santa Cruz, CA
I don't believe it.
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thomas.wong1986 says
Their model is busted...
at least they're consistent(ly wrong).
how the fuck can someone be wrong every single fucking year from 2006 and still be in the business of making forecasts.
that people are throwing these retarded predictions around, when they have been wrong ----every single fucking time---- just shows how stupid people are.
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Santa Cruz, CA
Maybe things are looking up in San Jose, but elsewhere forget it. California is so broke it is now laying off those highly paid government workers. Drive around and see those people from south of the border pushing baby strollers. They ride in a 98 toyota. So, WHO is gonna lend them $500,000 to buy a place? Who is gonna lend them $350,000?
The "no documentation loans" is oddly funny, since they were made to people whom the liberals would also call "undocumented"=illegal.
Liberal politics have bankrupted this state and the highly paid high tech people can afford to buy here and there. The overall situation is dire however.
My friends are angry with themselves for not selling at the peak and leaving town. One guy has a dump in a bad neighborhood near the beach that was once "worth" $650K at the peak. It's small, crummy, surrounded by apartments and Mexicans. It's going back down to about $170K. They shot two guys about 100 yards up the street (dead).
My other friend has an awesome property that is like a shangri-la, once it was "worth" about $1.5 million. Today, shave off about $1 million. He wishes he had sold and moved, but his wife was adamantly against it because the slacker kids may have had some trauma of making new friends, etc.
One guy I know bought a tiny place with his down of $100K, his entire net worth, it was about 650 square feet and cost over $450K. He LOST it and his dough when they foreclosed.
I've seen this movie before, the only thing missing are zombies walking through the wreckage.
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San Leandro, CA
clambo says
Spend some time with the OCCUPY Groups.
How long before Gubmint can no longer afford to kick the can down the road ? or
Will that cat Greenspan figure out the rubix cube ?
