Dr. Dotzour, model economist
For years, we’ve been alluding to Dr. Mark Dotzour, Chief Economist of the Texas Real Estate Center as the “model economist” and called for his being Yun’s successor because of his honest and sometimes controversial economic outlooks.
We are not exaggerating when we say that most very high ranking executives in Texas commercial real estate firms and residential development groups will not make a move without hearing Dr. Dotzour’s outlook.
Because of that, we pay very close attention to his thoughts on national issues as well.
No double dip
In Dr. Dotzour’s most recent speech at the SIOR Conference, he said there was no double dip, that we haven’t even hit the bottom yet.
This conflicts with what many other economists are saying and honestly, it conflicts with what we have been saying. We’ve even shown you via chart where the double dip exists. But when Dr. Dotzour says these up and downs don’t account for the bottom yet, we are a bit afraid of what the bottom looks like.
Economy looks better, why the sour outlook?
Unemployment is bouncing up and down but is overall improved, corporate profits are way up, layoffs are way down, new home construction is more realistic and improving, existing home sales are improving, yet Dr. Dotzour’s outlook isn’t exactly sunny.
Dr. Dotzour said, “The government sector has postponed right-sizing at enormous expense to the American taxpayers” and alludes to “Unfathomable budget deficits” holding the economy back.
We highly encourage you taking time today to listen to Dr. Dotzour’s audio speech or at least thumbing through his slides. It may change your mind on some widely held beliefs about the national real estate economy.
Click here to hear Dr. Dotzour’s speech and
click here for his corresponding slides.
Ben Fisher
May 29, 2011 at 2:23 pm
We are seeing the same here locally. No rush to buy here yet!
Eric Holmes
May 29, 2011 at 9:01 pm
After a long weekend of not thinking of real estate I can honestly say this article reminds me of one of my favorite quotes from the movie Caddyshack… "RAT FARTS!"
Ruthmarie Hicks
May 29, 2011 at 11:50 pm
Its been SLLLLOOOOW in Westchester NY – However, there are too many people renting. Being close to Manhattan – rents are generally high, but they've gone up a surprising 4.5-10% in just a few months. Just this past week – two buyers that opted to rent last year got back into the market. Their leases were up and they got the bill….
The point is that as rents rise – those capable of buying who thought they could stay in cheap rentals are being forced back into the market.
Real estate markets are very local. In Westchester – areas near Manhattan with easy access to metro-north trains that are within 40 minutes of Grand Central – these areas appear to have bottomed. The upper part of the county and across the Hudson river in Rockland and Orange counties – as well as Putnam and Duchess counties which are due north but still on the east side of the Hudson – are probably not there yet. Living in these places means a long commute if you work in the city. 2 hours each way in some cases – and so the demand is less.
Rob McCance
May 30, 2011 at 10:45 pm
The market is smoking in Atlanta.
Dunes
June 1, 2011 at 11:02 am
Exciting News…
Now Agents won't have to change their Marketing Plan and can spend another 5 years sharing their expertise by announcing we are now at the Bottom..Good time to Buy
Bonus..Get to keep using the "Don't have a Crystal Ball" spiel
Zoom out please ...
June 2, 2011 at 8:47 pm
"Double dip" vs. "not hit the bottom yet" is just a matter of perspective. Yes, they showed a "chart where the double dip exists," but it's so zoomed in, it's hard to make head or tails of it.
Take a look at the chart, with more perspective:
4.bp.blogspot.com/-KkQCtaML0eM/TabqjFZ8K-I/AAAAAAAAAg8/OvvX8GJ9pt4/s1600/2011-Case-Shiller-updated.png
The housing bubble that began in the mid-nineties, and popped in the mid 2000's, has no historical president in the past 100 years. It's pretty unreal to look at, and hard to argue that it's somehow stable at a value 50% higher than it's historical average (and higher than any time in history, excluding this point in the bubble on the way up).
So … what happened in 2009? Massive government intervention to keep houses expensive. First time buyer's credit was the big one. They quite literally gave people money to buy a house that was still radically overvalued. They basically just stalled the natural course of the bubble, nothing more.
Of course, with the banking system as broken as it is, it's really hard to say much of anything – maybe the market will continue to be propped up by various means, maybe the markets will be flooded with ever more cheap money that will drive prices up / keep them stable.
But I would say the smart way to think about it is to step back – that is, zoom out – and ask yourself if these prices are at all sustainable. I don't see how they can be. The price is just still correcting from its absurd high.
Articles that keep saying "housing prices are down" completely miss the point. Housing prices are still _up_, not down. Down from yesterday, or last year? Maybe. Down from five years ago? Yes, of course, how could they not be?
Down from ten twenty years ago (inflation adjusted)? No way, still way up!
Matthew
June 5, 2011 at 6:08 pm
The market is weird in Chicago. Prices are near bottom on many properties because investors are buying if they can for sure make a profit as a rental. But my luck of finding such a deal is difficult with this competition. Furthermore in the one offer I made I backed out because they did not disclose that the roof needed repair, and tuck pointing done which amounts to over 30K in special assesments. As well as when I put my offer in, although I was the only offer the banks argued over who was the actual owner of the property! In the end they found that Fannie Mae owned the property and then Citibank bought the property according to my realtor "illegally" because they were suppose to take it off the market and have mine as the only offer for 30 days to stop foreclosure proceedings. Ironically Citibanks greed was shortsighted in this case because with all the trouble in the building they will loose a lot of money! This may give a clue as to just how complicated it is to buy a condo in Chicago, everything is a complete tangled mess. I feel confident with patience I will find the deal I am looking for. I estimate I have two years to do it.