MacroMarkets’ Survey Now Says…Nearly Half Expect Double Dip

-2% is noise. Market in SF has been, and seems to continue you to be, basically flat since Q2-09 (+/- 5%). Good nabes 10%-15% off highs, worse nabes 20%-30%, average 15%-20%. Nothing has really changed.

Some analysts backsolve inflation expectations from the market pricing of various bonds, futures and derivatives. This has the advantage of showing where people are putting their money and not just their mouth.
The Cleveland Fed produces one such measure, although I believe their model incorporated both a survey component and a backsolved component.
Their 10-year expected inflation is 1.8%
http://www.clevelandfed.org/research/data/inflation_expectations/index.cfm
Note though that these measures typically produce an “expected value” which is not necessarily the value that is most likely to occur. i.e. if 80% of the market believes inflation will be 0% and 20% believes inflation will e 10%, the expected value will be 2% even though no-one believes that 2% is a likely outcome.
Note also that as with inflation, you can backsolve expectations of Case-Shiller housing prices by looking at the prices of housing futures. But this is more error prone since housing futures are much less liquid and deep then credit products.

I’d be interested to see how this survey group’s predictions have fared in the past.

Don’t forget, most financial experts are wrong most of the time. For example, right after the financial markets bottomed, for the next 6 months it was a non-stop barrage of experts warning of the coming double-dip. It never happened, and in fact, that was an excellent time to be investing.
Housing, as usual, lags the financial markets by a year or two. Since we are in the middle part of a nice solid period of economic expansion that should last at least another year or two more, there is no reason to expect housing to collapse again — it will follow along with the rest of the economic expansion.

Since we are in the middle part of a nice solid period of economic expansion that should last at least another year or two more
Not sure I agree on this point.
Middle part? we could very well be in the last gasps of the echo bubble in stocks and commodities. I don’t understand why people act as though we are in a healthy economic expansion when the country with the Reserve currency is engaged in overt quantitative easing and multiple countries are engaged in covert quantitative easing, a Central Bank utility of last resort used in times of crisis. we are in CRISIS economy!
I agree with others. the experts are often either not very smart or they are pushing an agenda (like Yun for the NAR). a double dip has always been a very high probability given macroeconomic events. The fact that these people are just now figuring it out shows how far behind the curve they must be. What data are they looking at? The return to house price depreciation in YOY terms was built into the cards and OBVIOUS by last summer based on mortgage application data amongst other things. (Yes, I called it here on Socketsite last June/July when the bulls were crowing about 18% YOY appreciation).
Trying to forecast 2015 (and even 2012) is a fool’s errand these days, since we don’t have a market economy in Real Estate. Housing depends too much on QE, ZIRP, Fannie/Freddie/FHA, and legal issues surrounding Foreclosures and title and securitization. You’d have a better shot at forecasting the hit Youtube video of Summer 2015 than RE pricing.
will the echo bubble in stocks/commodities eventually feed back into RE? Possible, and that is what our leaders are hoping, but less likely than in years past, and certainly not as much as it did in the mid 2000’s. some (among many) reasons: the zombie banks cannot lend the way they could during the housing melt up, increased stock/commodity prices aren’t being transmitted to average worker due to globalization and polarization of incomes (shrinking middle class), aging of America (older people need to DOWNSIZE), likelihood that Treasuries and therefore Mortgage interest rates will rise, and so on.
there is little doubt that at some point nominal RE prices will rise again. when is anybody’s guess, and much of it has to do with the money supply (controlled by the Federal Reserve) and the transmission ability of the Too Big to Fail Zombie Banks (controlled by Satan alone, and encouraged by our Fed and Govt). But the Zombies aren’t interested in being a transmission mechanism to the real economy (which increases monetary velocity). They are interested in being parasites that suck up as much money as possible and pay it out in dividends and bonuses for their elite few CEOs and certain preferred “investors”. The rest fills the unfillable hole that they have hidden with accounting gimmicks (encouraged again by our govt/Fed, and likely Satan).
The real economy will have continued difficulty given the parasitic Financial class that sucks all the real wealth from the economy and misallocates it to unproductive endeavors. (like creating toxic “assets” that are intentionally complex in order to make valuation impossible, and thus more easy to extract wealth from investors).
My forecast for RE in real dollars: negative to flat for many many years.
In nominal dollars: -50% to +200% over the next few years.
My forecast for SF RE: about the same. SF is not special, it pretty much follows the rest of the nation with a small amount of variability just like all major metro areas. there will be a few unique local aspects of course, but the general trend will follow the nation.

“I don’t understand why people act as though we are in a healthy economic expansion”
Leaving aside mindless cheerleading, the act is an economic form of Pascal’s wager, and only time will tell if the wager is consequence-free.
What we need is an economic or political Richard Dawkins (or Darwin!), and I’m afraid Ron Paul doesn’t cut it.

Writing is on the wall, folks. In ’08/’09, real estate was spared a catastrophic plunge solely through government intervention and nationalization via Fannie, Freddie, and FHA. The Feds have already signalled that they plan to exit the business eventually – only question at this point is when and how. Certain Fed govs have also said they will stridently oppose future QE.
You can debate as to whether Pac Heights will fare better than Noe Valley, or bay area better than westside L.A., etc., but the macro prospects for real estate are fairly obvious. We may not see another big drop, but there will be considerable downward pressure on home prices as the government – which supports ~90% of mortgages made in this country today – unwinds the price supports.

older people need to DOWNSIZE
That’s where I do not agree totally with ex-SFer.
This was true in a world where Social Security and Medicare were guaranteed to follow you every step of the way into your retirement.
There are (evil 😉 ?) forces at play that want to remove this option for people born after the 1950s. 401(k)s and such will never be enough to fill the void of late boomers and Gen-Xers.
This is also one of the reasons behind the past bubble: people doing a land rush to capture future rental income for their retirement (and build equity along the way). Do not underestimate the volume of “investors” in this market. And their main goal is to cushion the future retirement shock.

sfrenegade,
I never said it was a good way to build retirement. Only that it was a way chosen by more and more people. Whether this is a wise choice is another story. A lot of RE investments are made by people who look in the rear-view mirror to figure where they’re going.
Rentals make you wealthy if significant appreciation comes into the equation. Otherwise it’s mostly a fool’s game and approach it with a 10-foot pole. Always buy low and in decent shape.
Rentals can also be a cushion for inflation. If SS payouts increase less than real inflation, you’re losing out little by little. If your RE capital increases with or faster than inflation, you’re buffering that with rentals as long as they’re not a black hole for cash.

Yup. In the case of the RE investor, you have the high leverage that multiplies the chances for that “buy high, sell low” phenomenon. You can also have a high return thanks to that said leverage, but it’s extreme both ways but wrong-timing can really do you in financially.

Nonsense! People are still making money in real estate, even now.
Here is a place that was just sold for $700K. The commission would be $35,000 and the seller looks to have put about $23,995 into upgrades and costs, so they net 641,005.
All they paid was $641,000. In 1998.
That’s five smackeroos, in puuurre profit.
http://www.redfin.com/CA/San-Francisco/2395-Bryant-St-94110/home/12277293

“How can it be a double dip when we never got up off the bottom from the “first” dip?”
There have been several commenters here who claimed we have already passed bottom, and that bottom was somewhere around March 2009, Q1 2009, or Q2 2009.
As to organic sales, the Morgan Stanley data didn’t agree that that was bottom. I agree that it almost seems more like a dip followed by a flat period thus far.

The 2395 Bryant sale was for a condo. The 1998 sale was for a 2395-2399, a 3 unit building. Somebody who knows the marketplace would have gone “641K, 1998, Bryant? That doesn’t make any sense. Because 641K would have bought a mansion on Bryang back in 1998.” That’s what I did. But put it up on Socketsite without thinking or understanding and then have somebody else draw a forced, derisive conclusion is what you did. Not to mention that it was a condo and Greg was talking SFRs anyway.

d’oh!

haha. sure man. Good “point” by you.