It’s right around October every year that “experts” left and right start offering up their economic outlooks—I like to call them “predictions”— for the coming year. This month and next, just about every economist, housing expert, financial analyst and what-have-you breaks out a crystal ball. And with 2012, which we all know is the world’s end, coming upon us during this dark economic hour in time, I’m sure there’ll be no shortage of gloomy predictions on how long the economy and the real estate market will be in the dumper.
During a recent stint extensively covering the commercial real estate market, I asked several “experts” when things would start looking good—in the commercial industry there is no shortage of people who want to be publicized as an expert, so I got to speak with dozens and dozens of wannabe Swami’s. That was in October 2008. Along with a barrage of particularly gruesome thoughts and figures, I got a slew of creative phrases with which people used to coin their predictions of what the New Year would bring. And it was the phrases, and certainly not the “expertise” being offered, that struck a chord.
One of the favored phrases being tossed around was “Zen in 2010.” Based on how things are shaping up in commercial real estate, I’d say most of those “experts” are probably changing their tune to something like: “You’ll thank heaven in 2011.” To be fair, of few commercial experts I interviewed actually said just that, and a few even came up with rhymes that had things only starting to look up way out into year 2013.
On Wednesday, the California Association of Realtors is releasing their 2010 forecast. LBPost will put up a Realty Bites story that afternoon with state and localized details on expectations for the housing market, including an interview with the association’s president. Next Tuesday’s column will include some of CAR’s prognostications for the housing market.
But what I’d like to see and share with everyone is your predictions (as in “You, the Reader.”). Something like: “It’ll still be slim in 2010.” Or perhaps: “You’ll be rolling sevens through 2011.”
I’d like to give some credit (let’s say 40%) to lbpost.com reader Paul B—who I’m guessing is actually Paul Bond, west coast business editor of The Hollywood Reporter, an expert who offered his opinion for a Realty Bites a while back—who posted his prediction about the state of the economy and the market on last week’s Realty Bites: “I said it before, I’ll say it again. Wake me up in May 2010, that’s when the real bottom is in.” I like that Mr. Bond: “Wake me up in May 2010, that’s when the real bottom is in.” Come to think of it, “again” also rhymes with “2010,” so we should credit Paul B with a twofer.
OK, I’ll start it off: “Things will be nifty in 2050.” Just kidding. I’ll likely be dead by then, or really, really old and reminiscing through an oxygen mask about struggling to survive the “Great Downturn,” or whatever label history gives this most heinous period in the U.S. economy.
To preemptively clear the haze about my upcoming thoughts, take a look at CAR’s report issued last week. It shows that the median price of an existing home fell 16.9% year-over-year in August. But the good news is home sales increased 9%, and the statewide median price of an existing single-family home actually rose 2.6% in August compared with July. Things appear to be slowly getting better by the month.
Here’s the formula I used to come up with my predictions: I considered what I know and have been hearing about the region’s housing market, then I subtracted my past experience covering commercial real estate (which I expect to languish in the year ahead), and then I subtracted my dire pessimism about the job market. The equation yields two predictions, one for the employed and the other for folks like me. First: “You will win if you buy a home in 2010.” And then there’s: “Having no job’ll be hell until 2012.”
You can e-mail ([email protected]) me your creative prediction, or you can just leave your comments at the bottom of this column. I’ll publish some of the more creative and insightful remarks in next Tuesday’s column.