I had a sticky note planted on my monitor (back when I used PCs) until the Great Housing Bubble finally burst. It read as follows “Edward’s November 4, 2005 prediction: U.S. will have a $3 to $5 Trillion equity loss when the bubble bursts.” That was so astonishing (if correct) that I kept the reminder of his prediction where I could refer to it at a glance. That was, until later when I asked him for an update of his opinion in August of 2008. His revised opinion?: “I was wrong. I’m looking at it being more like $5 to $7 Trillion in lost equity”.
He was spot on.
Dan Levy of Bloomberg reports:
Dec. 9 (Bloomberg) — U.S. homeowners have lost about $5.9 trillion in value since the housing market’s peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow.com.
Almost half a trillion dollars was wiped out this year through November as housing headed for a third straight annual decline. New foreclosures and higher mortgage rates in 2010 may hinder a rebound, the property data service said today in a statement.
Edward happens to be an investor and close friend I’ve known for over 30 years, from Santa Barbara, CA. It was on his information that I became contrary towards the housing market in January 2005 as I watched the market feverishly race towards disaster.
Believe me, I’ll be listening to Edward often as we navigate through this market.
