Here’s a prediction most of you will agree with: In less than three months, you will be in two-thousand-ten. My little compilation is about as a creative and definitive of an opinion as you’ll get if you ask people to add rhyme to a reasonable opinion on 2010’s economic and housing picture. Even with the positive signs in housing and the economy starting to pop up left and right, there are just too many questions—“Is there a wave of foreclosures about the swamp the market?” “How much will the commercial sector drag on the economy”—rather than answers about what the coming year brings.
In response to a call-for-rhyming-predictions in last week’s Realty Bites, which begged the question “Economic Future: Zen In 2010, Or Hell Until 2012?” lbpost.com readers offered some, but not many, definitive thoughts on the year, or next few years, ahead.
The column received a lackluster response compared with most Realty Bites, perhaps because so many regular readers from Long Beach’s real estate industry were in San Jose last week for the California Association of Realtors’ annual meeting, where CAR’s top economists deliver their economic and housing forecast for the coming year. The forecast, which was covered last week in the lbpost.com, called for modest recovery in the housing market. For the left-brained, here is a report detailing CAR’s 2010 forecast in less poetic terms.
To be fair to readers, a few responses were both creative and enlightening, and if you pay close attention to news on the economy and housing, experts don’t really have a much idea of what 2010 brings.
In Robert Frost-like fashion, Belmont Shore-based Realtor Jeremy Colonna churned out a poem that sums up his feelings and explains things pretty well: “In twenty-ten, things could turn out just great, With a nice mortgage and food on your plate, But with jobs on the fall, And foreclosures for all, Just make sure not to circle the date!”
In his response, Colonna puts some blame for the confusion surrounding market conditions in 2010 on the government assistance that seems to have artificially buoyed things up a bit. “The bottom-line is that until the market is allowed to correct itself and create a natural equilibrium, there will be conflicting signals coming from everywhere,” Colonna writes.
Steve Goddard, CAR’s incoming president, offered a fairly positive rhyme. “Real estate is happening. When? In 2010.” While Goddard, who is set to take over as the top dog of the state’s utmost authority on the housing market during the year in question, has motive to be optimistic in his outlook, he often tempers his upward-looking thoughts on the market. However, in a rhyme, there’s not much room for such temperance, so one could take the absence of an exact time period next year (1Q?, 2Q, 3Q, 4Q?) as his cautionary statement.
Reader Paul B, who gets partial credit for the rhyme-prediction column idea because he offered his thoughts on the market in creative fashion for a Realty Bites a while back, offered up another one. “Don’t bother to delve until 2012; but I don’t think it will stink in 2011.” Let’s hope that Paul B, who is Paul Bond, west coast business editor of The Hollywood Reporter, could have come up with something a bit better had he not chose to focus his comments and efforts in his response to something that is, of course, entertainment related by taking a swing at a 2012 reference in last week’s column: “Hey Don, is that world-coming-to-an-end in 2012 a reference to the upcoming movie ‘2012’? Heck, the only thing coming to an end there is Hollywood’s assumption that John Cusack can carry a film. That movie looks dreadful… like preachy, politically correct drivel. Prediction: It opens at $40 million, but drops 70% in a week and never tops $75 million domestically, losing the studio a good $50 million or so.”
Reader Robert wrote: “I wish the so-called analysts would do that rather than seem to spend their time coming up with quips that make them sound more like carnival hucksters than serious professionals or ESPN screamers. That said, my expert prediction: Stay in your den in 2010, the market will leaven in 2011.”
As a student of real estate and the economy, I’d like to add one more observation. The aim of whatever market (stock, bond, real estate, grocery) you are in is to get the best deal. Buy low. There may indeed be many more foreclosures to come, but housing stock in California is low and getting lower, and prices have returned to, or sank below in some areas, the point at which they were before. The odds are good, in my opinion, that Congress will extend the first-time homebuyer tax credit, giving more incentive to first-time buyers to get into a now mostly affordable housing market, and unemployment is starting to stabilize. I think the upcoming holiday shopping season, with sales expected to take another dismal annual drop, this year only 1%, will be the final punch to the gut of the U.S. economy before the real rebound begins.
There you have it: “The rebound begins in 2010.”