2008 is at last behind us and it was what it was. A thoroughly memorable year for the mortgage and real estate industries, and the entire U'S economy for that matter. As years go, a few in the recent history have had as many spectacular market events rumble through the landscape as this one, leaving charred and burnt wreckage smoldering behind.
Some of the true visionaries inhabiting this land had a few encouraging words to pass on about how 2008 would shape up and now they ought to be spanked for ever opening their mouths. Consider this.
"I expect there will be some failures.... I don't anticipate any serious problems of that sort among the large internationally active banks." That was Fed Chairman Bernanke expressing his views on February 28, 2008. This past fall WaMu just flat out fell apart, Citigroup survived on the taxpayer's money to see another day and so on. The list is long and colorful.
"Existing home sales to trend up in 2008." This from NAR's press release dated December 9, 2007. That was an entirely optimistic view of the future that proved to be plenty of hot air that all active housing market observers can attest to.
"Freddie Mac and Fannie Mae are fundamentally sound.... I think they are in good shape going forward." Barney Frank, House Financial Services Committee Chairman, had the nerve to say this on July 14, 2008. Only two short months later the government took over their operations because they were basically collapsing under the weight of bad mortgage paper.
Generally speaking, it's good to be optimistic about life and markets and those sorts of things. Yet, when the writing is rather plainly on the wall, saying something that goes straight against reality is dangerous to your reputation. Not only that but when people in high positions do it the marketplace starts doubting the soundness of the business environment and becomes really nervous about what lies ahead. That predictably leads to more caution and further slowdown of economic activity. Be careful out there what you say.
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Provided by:
Esko Kiuru
Mortgage, real estate and apartment industry analyst
www.BluefoxToday.com - syndicated mortgage, housing and property management blog
eskokiuru@gmail.com
My cell: 702-499-1006
Esko, 2008 fell far short of what I hoped it would be, but I am hoping that 2009 shines a little brighter.
Well, at least one of them was right with the trend going upward. Everyone is crying in their beer about 2008, but in reality, we closed more homes in 2008 than 2006 (and obviously crushed 2007) here in the Las Vegas / Henderson area. They may have sold for less money, but the activity is there and that is a major first step to a strong recovery effort.
Now if we could only get reduced doc loans back......if only......
I love the post. I missed all of my predictions. The good news is I know 2009 will be better.
Terry Miller
George,
It's a new year and a new attitude is called for.
Mike,
Low-doc mortgages will return once the lenders clean up their balance sheets.
Terry,
It's fun to check back on what people said about certain things and compare it to the real thing.