As quoted on
Diane Swonk's corporate profile:
Chief Economist Diane Swonk is one of the most quoted economists in the financial press. She is seen regularly on national and international television and her commentary can be read in top financial news publications throughout the world. With more than 20 years experience in financial services, Diane has proved to be an invaluable resource for policymakers and business leaders from Washington to Tokyo.
Diane C. Swonk,
New York Times, March 25, 2005:
"I just don't think we have what it takes to prick the bubble," said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90's. "I don't think prices are going to fall, and I don't think they're even going to be flat."
Lou Minatti, December 5, 2005,
warning a guy in San Diego that he's about to make the biggest mistake of his life:
As SoCalMtgGuy said, what do you think accounts for a house in La Mesa doubling in value in just a few years? Do you think it's because everyone wants to live there and people are willing to pay premium prices and therefore $400k is a reasonable price for a *tiny* house in a questionable neighborhood? (As an aside, do you really want to live in an 800 square foot house with two kids? For decades?)
Let me give you a personal history lesson. The Texas RE market 20 years ago sounds a lot like SoCal. Lots of people were moving here in the 1980s (and still are). Some cities, including Austin, had a "buzz". At the time it was considered to be the "in" locale. Prices increased accordingly.
Then prices dropped and continued to do so for YEARS. In one quarter alone (1989) Austin RE prices dropped over 20%. That's not a typo. 20% in ONE QUARTER. In a place that lots of people want to live.
Please read this article. You are inside the bubble and cannot see what everyone else sees. We went through it before and know what it looks like, you don't.
That was almost 4 years ago. I see two familiar names (
Rob Dawg and SoCalMtgGuy has vanished. Meanwhile, I wonder what happened to the guy pondering the house.
5 comments:
Outstanding line of t-storms rolling through tonight. Yeah, I like storms. I'm weird.
She sounds like every National Association of Realtors spokesperson I have ever seen on tv. I remember when they were running those commercials trying to convince people that it was still a good time to buy as the bubble was starting to deflate. Making outrageous claims about how quickly home prices historically increase over time. I dont remmeber exactly what the figure was, but it was bogus. I always ask people to think about it like this: is there any other working asset that you buy that doesnt depreciate over time as it comes closer to the end of its usable life. The only reason homes increase in value is because of inflation, and scarcity of land in developed areas. Otherwise as they age and require more repairs they would be worth less and less just like a used car.
The bottom line is your home is your shelter, not an investment. If you want to buy real estate as an investment good luck, but dont use your primary residence.
Highly leveraged investment...like 100% margin account and buying a microcap stock...rather than the being 100% long in the S&P index...hey if the loan is nonrecourse it's a good bet...but don't be upset when you loose on the bet. Margin loans are limited now plus margin calls if the market goes against you...foces you to think...so end high leverage RE loans..
SoCalMtgGuy ain't dead, just moved on. He no longer posts on thehousingbubbleblog.com and hasn't for years.
He started his own website originally called anotherfuckedborrower.com (which now redirects to housingbubblecasualty.com/). But he rarely posts there.
I believe that SoCalMtgGuy gets credit for the common use of "FB".
-Cassandra
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