Snaith Needs to "Unload" His Home
Time to test out that soufflé theory. Sean Snaith, whose sunny soufflé analogy is a permanent fixture in local articles, has to sell his home. The Stockton Record has the dirt:
Some California homeowners, if the Munroe-Hatamiya analysis is correct, are into the same pattern with their home equity. Sure, the Valley becomes less affordable as home prices rise, but the "wealth effect" means people who own homes spend money - home- equity loans being one example - and that helps fuel the retailing and service sectors of the economy. It's kind of your basic house of cards if Munroe, Hatamiya and a bunch of other economic soothsayers are wrong about the soufflé analysis.
One of them is Sean Snaith, director of UOP's Business Forecasting Center. If Valley housing collapses, Snaith would suffer some very real economic pain to go along with some of the esoteric economic formulas he and other economists use.
That's because Snaith has a home he needs to unload. He's headed to Florida where he'll take up a similar position at a much larger college, the University of Central Florida in Orlando. He's been here two years and probably secretly wishes he'd gotten the job six or eight months ago, before the inventory of homes for sale shot up, prices softened and buyers became the market bosses. He will now have a real life opportunity to test the soufflé theory of Valley real estate.
8 comments:
Stick a fork in that sue-flay.
5 to 1 he'll rent in Orlando.
I've said it many times before. You are doing an outstanding job on this blog. Thank you.
YeeHAW! That is unbelievably fantastic. Snaith has been spouting drivel about 30% annual price increases being driven by fundamentals (?!?) and sustainable in the Valley economy (despite local jobs not paying enough for the locals to buy in the current market).
But I gloat too soon. If he bought in mid-2004, that's a year before the top of the market, so he can make a little money after fees.
He may be hard pressed to make even a little money now. With the way sales are going and the amount of inventory on the market, he will have to cut by 30% just to get a sale. That takes it back to 2004 prices. Hope he buys a big house in Florida...real estate only goes up and they aren't making any more land.....
i am seeing people sell today at or below 2004 prices.the change is recent,and dramatic.i blame a great part of this disaster on "economists"like snaith,and lenders who completely abandoned any underwriting standards...i hope he takes any equity he has and buys investment condo's with libor option arms,and 80-10-10 financing.
Looks like Snaith is going to be right.
No bubble in sight and mortgage rates falling.
Regarding Snaith, yes he'll pay the price for his so-so forecast with his own home sale ..... but one thing about real estate, he's got the opportunity to buy in an equally distressed market, so if he's selling @ 15-20% off 2005 prices, he can buy at a similar discount.
Hey, sean snaith actually gave a great interview: http://www.ourblook.com/Economy/Prof.-Snaith-on-Economy.html
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