If this week’s cover story in Barron’s cover article on a housing bottom looks vaguely familiar, its because it is familiar.

Almost 4 years ago, the magazine published pretty much the same article saying mostly the same things.

In the July 14, 2008 edition, Jonathan R. Laing wrote “Bottom’s Up: This Real-Estate Rout May Be Short-Lived.”  That article was terribly wrong, and many years too early.

The latest RRE bottom calling article is dated March 17, 2012, titled Home Prices Ready to Rebound and is also penned by Jonathan R. Laing. We don’t yet know if its terribly wrong and many years too early. However, I would hazard to make the guess that its probably modestly wrong and a few years too early.

As the current rate of Barron’s Housing bottom cover stories, we should expect to see a third bottom call 43 months from now — around October 2015. I expect that bottom call will be mostly right and perhaps even a touch late.

>

Previously:
Why Barron’s Housing Cover Is So Terribly Wrong (July 12th, 2008)

Sources:
Bottom’s Up: This Real-Estate Rout May Be Short-Lived
JONATHAN R. LAING
Barron’s JULY 14, 2008
http://online.barrons.com/article/SB121581623724947273.html

Ready to Rebound
JONATHAN R. LAING
Barron’s MARCH 17, 2012
http://online.barrons.com/article/SB50001424053111904797004577281453828447714.html

Category: Contrary Indicators, Psychology, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Barron’s: Home Prices Are About to Bottom (take 2)”

  1. albnyc says:

    If wishes were horses…there seems to be a lot of wishful thinking on the Street these days. We may be topping…

  2. bdw says:

    What happens to home prices when boomers sell/retire and borrowing costs return to normal with actual underwriting? Bottom and rebound seem like recovery from a credit bubble: slow and grinding.

    Barry, what is the next creative “insurance” product that will turn on the loan machine again?

  3. Jojo says:

    The start of spring time brings out the same old stories. Eventually they will be right. Meanwhile, publishers need to fill space.

  4. jib10 says:

    Important point that seems to get lost in there articles. Housing bottoming out != house prices rebounding. The last time we had a large nationwide decline in housing prices, the depression, housing bottomed out in 1933 but prices did not start rising until 1943. We could very well see the bottom in housing prices this year or even this spring but still be a good 10 years from prices rising much less ‘rebounding’ back to their previous level.

  5. super_trooper says:

    @BR,
    according to your logic, aren’t we currently 43 months post the “prices are about to bottom” article? = Right now prices have bottomed. We just have to wait 43 months for prices to start going up.
    Rather than “As the current rate of Barron’s Housing bottom cover stories, we should expect to see a third bottom call 43 months from now “. Maybe I am 43 months off your “logic”

  6. gc says:

    Yes, should I read the article to find out the explanation about how the 10 year bond returning to 4%, or something expected for a healthy economy, will help home prices rise?

  7. bda_guy says:

    BR, I think that the magazine cover will be the exact opposite of what you suggest. When I see a general news mag cover (ie. TIME) proclaiming “Why you should never consider buying real estate ever again!”, that’s when the TRUE bottom will be in.

    ~~~

    BR: Only we already had that cover

    Time Magazine – The Case Against Homeownership (September 6, 2010)
    http://www.ritholtz.com/blog/2010/09/a-tale-of-home-prices-told-through-the-cover-pages-of-time-magazine/

  8. Ridge Runner says:

    If inflation kicks in soon and hard, perhaps Laing will be correct for nominal price changes.

    Barring that, the most mendacious part of the cover is the “J” shaped curve, suggesting a sharp rise after the “bottoming” where an “L” would be more defensible (although a “drooping L” might be more realistic).

    As you say, we can check again in later years. As the homeownership rate continues to settle, the labor force participation rate drops, and incomes remain stagnant, Laing will probably have to write more ‘hope for the future’ articles before, like a stopped clock, he “gets it right”.

  9. sellstop says:

    I don’t think housing will be the next destination for debt. Probably the stock market. The Boomers need to get some money fast and that is the stock market. They will probably get sucked in.
    Housing, not so much. They know now that that can be illiquid. And slow. And there are too many big houses out there.
    And interest rates will be rising as the boomer get out of bonds and as the rest of the world shuns US debt due to the demographic situation in the US and the reluctance of US voter to raise taxes to pay our debts……

    see the blog………

    gh

  10. bear_in_mind says:

    More Seniors Using Reverse Mortgages to Raise Cash
    CNBC
    http://www.cnbc.com/id/46735752

  11. [...] we noted the repeated housing bottom calling by Barron’s. That was not quite a contrary magazine cover indicator because its a) on a business imprint, not a [...]

  12. Joe Friday says:

    Surfs Up !

    NEW TSUNAMI WAVE OF FORECLOSURES SWELLING

    With the mortgage settlement among the nation’s five largest banks and state attorneys general behind them, lenders in twenty-one states are now seizing homes at rates not seen since November 2010, most dramatically in Florida. In Tampa, foreclosure filings in February were up 64 percent and in Miami they spiked by 53 percent.

    To paraphrase Mr. Rogers, “Can you say ‘falling home values’ kids ? I knew you could.”

  13. [...] been no shortage of housing bottom calls of late, including from Calculated Risk, Barron’s, Karl Smith at Modeled Behavior and a sometime-this-year prediction from BofA Merrill Lynch. [...]

  14. [...] is a perennial rite of Spring, not remotely slowed down by such niggling factors as consistently being wrong year after year, unsupported by data, and ignoring key factors that strongly suggest “Not this [...]