June 14, 2012
In Washington the definition of an expert is someone who can be wrong all the time and still be an expert. The folks at the Joint Center for Housing Studies at Harvard are clearly experts.
The Joint Center gained notoriety in the last decade for completely missing the bubble, dismissing those of us who tried to warn that homebuyers in the years 2002-2007 were taking serious risks. Here are a couple of choice comments [thanks to Ben Zipperer].
“So that leads us to the conclusion that while double digit price appreciation is a thing of the past, that it can’t be sustained, that what we’re looking for at least in the next few years is a much flattened price appreciation over time. Over the long run however, we tend to be relatively bullish in terms of prices because we still have a growing population. And in many markets there continues to be constraints on supply. So a rough, rocky patch, lots of rain and clouds and maybe thunderstorms, but we don’t think the sky will fall on the housing sector.” – Nicholas Retsinas, July 18, 2006.
“2007 doesn’t look very good form the housing market’s point of view. I do think we may be near the bottom. The good news for example is inventories have started to stabilize, but at a high number. So I think we’re near the bottom but I think we’re going to be at the bottom for a while and if history is any guide, then it looks like this housing market downturn will probably last well into 2007, and it won’t be toward the last quarter, maybe 2008 before we see signs of it turning around.” – Nicholas Retsinas, December 26, 2006.
Given that the Harvard Center completely missed the largest decline in the U.S. housing market ever, they would naturally be the people you would contact to discuss the bottom of the housing market. In this case the Harvard boys happen to be right, sort of like a stopped clock will be right twice a day.
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