We can’t help but take a little journey down South this morning where Realtor Gary Watts (a.k.a. Scary Gary) appears to be the groundhog for the Orange County real estate market. And apparently he hasn’t seen his shadow. From FORTUNE:

If you want to know where real estate prices are headed in California’s Orange County, the man to talk to is Gary Watts. The Mission Viejo broker has 35 years of experience and doubles as a spokesman for the O.C.’s Association of Realtors.
But it’s his track record more than his resume that has won him serious credibility with his peers. In 1989 he earned the nickname “Scary Gary” by correctly predicting that the housing market in Southern California was headed for a tumble. Then, in 1996, he was one of the first to call the area’s rebound. Since 1997, Orange County home prices have seen a 195 percent rise. Will the good times last another year? Gary doesn’t hesitate. “Fifteen percent is pretty much in the bag for Orange County in 2006,” he says. “It’s impossible for prices to go down this year.”

Half a decade into the biggest real estate boom in our nation’s history — and a full two years after pundits began sounding alarms about its coming to a close — the endgame is still unclear. Pick your cliche: Are we in a bubble that’s ready to burst, or are we, as National Association of Realtors chief economist David Lereah recently asserted, headed for a “soft landing”? The almost daily drumbeat of national statistics doesn’t help sort things out. Is it more significant that we just had a fifth straight year of record home sales, or a third straight month of decreasing prices?
“No one really understands how these things behave,” says Robert Shiller, the Yale economist and author of “Irrational Exuberance,” who presaged the dot-com crash and has lately been spending much of his time studying real estate. “Looking for indicators is a little bit futile because we’ve never seen this kind of growth in housing before.”
In fact, the best way to get a handle on where the broader housing market is headed is probably to ignore the national numbers and heed the example of Scary Gary: Stay local, and always follow the inventory.

Always follow the inventory? We couldn’t agree more. And we’re on it.
A tale of two markets [CNN/Money]

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