New words from Gary Watts

NEW -> Contingent Buyer Assistance Program
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I suggest you read the post I did about Gary Watts analysis a few months ago. As someone who routinely purchases market studies for the acquisition of raw land parcels subject to real estate development, I would never use him. In fact, none of the developers I have ever worked with in Southern California do. Compared to <a href="http://www.realestateeconomics.com/">Real Estate Economics</a>, <a href="http://www.dev-res.com/">Developers Research</a>, or <a href="http://www.realestateconsulting.com/">John Burns Consulting</a>, he is a joke. If I were to go to an acquisition meeting with a proposal backed by a Gary Watts report, I would expect to be fired.





It isn't just me who has issues with Gary Watts. Chuck Ponzi has <a href="http://www.socalbubble.com/2007/10/gary-watts-tenth-circle-of-hell.html">ripped on him</a> as well.





Gary Watts is clearly a shill of local realtors. He puts out puff pieces used by local realtors to dupe buyers -- nothing more. He has a counterpart in San Diego name <a href="http://www.nctimes.com/business/chamberlin/">George Chamberlin</a>. Rich Toscano at Professor Piggington has <a href="http://piggington.com/chamberlin_supplemental">exposed his BS</a> on numerous occasions.
 
xlm,





Whose actual appreciation numbers were you using in your chart? I know for instance that Data Quick has the median down 7% comparing mid-Dec. '06 to the same time '07 and was wondering what to compare it to. Also appreciate your point of view and posts.
 
awgee



It will be interesting to see if the wealthy dudes are still spending the big bucks on the hemis and 427 vettes and older shelbys. They may do this to beat inflation as their money is in a tangible asset that can be sold with no tax consequence. There is also the ego premimium. I am excited about attending just to see the cars in the lot and the for sale area. I will keep you posted and take some pix if there are any cars that interest you.



caliguy



I copied the numbers from a google search on Gary Watts. They were pretty close to what I remembered.I am not sure where the actual figures came from. Thanks for the good words.



IR



The point I was making was that his information was never aimed at being first tier research such as the companies you mentioned along with Gobar, Market Profiles or people at that level. He is kind of a "pop culture" guy. That is why I wonder about all of the comments here since he really has little credibility. What kind of product to you buy land for? Public or private company? Just curious.
 
I work for a private developer. We do a lot more looking than buying right now. Raw land is coming down to land bank prices all over California. Most buyers are waiting as there is little urgency to acquire any properties. They know they won't be able to sell them to the builders for several years. I see a lot of wishing prices on raw land. My company is planning to purchase a few select properties this year and more in 2009 and 2010. We will likely be negotiating directly with lenders on foreclosed properties as we have been reviewing a numerous properties with debt on them. Given the negative residual values all over Riverside county, few of the property owners with equity positions are motivated to keep making payments.
 
I'm sorry, but I don't buy the "scary Gary" story. I have searched high and low for an article in the 90s that quotes him. I have never been able to find one, and it wasn't until late 2004 that his name comes up. A Lexis Nexis search confirms this. Some of the regular IHBer's can attest to how good my google-fu skills are, and how I can find just about anything. Especially if it is a craigslist ad.





Here is the puff piece from the OCR to get him some free advertising.


<a href="http://www.ocregister.com/ocr/sections/news/news/article_520497.php">


High Hopes For Housing. May 15th, 2005</a>.





<em>In the fall of 1989, Watts told a large group of real-estate folks packed into a Laguna Hills auditorium that O.C. prices would fall.</em>

<p><em>He expected it to happen within one year and span at least four years.</em></p>

<p><em>Watts further shocked the audience when he said values in some neighborhoods could plummet as much as 40 percent over that time. </em></p>

<p><em>Dave Knox, who was working in the title business, was at the event.</em></p>

<p><em>"I can't say I believed him," he said. "Nobody wants to hear that the party's over."</em></p>

<p>Did this really happen? I do not know. Typically any lecture or forum, would be advertised somewhere. Does anyone have evidence that Gary predicted the last bust? Maybe, a newspaper article, advertisement, or an old market report/flyer? There has to be something out there.


</p>

<p><em>And he's no star among the local real-estate seers. After three decades of forecasting, his popularity is pretty much centered in south O.C. </em></p>

<p><em>Esmael Adibi of Chapman University in Orange has been predicting local housing prices for decades. He's not familiar with Watts' work. Neither is Al Gobar – a venerable local real-estate watcher since the 1960s.</em></p>

<p><em>Watts knows that no one in his game is correct all the time. For example, his crystal ball didn't reveal the housing slowdown that hit O.C. in the second half of last year.</em></p>

<p><em>So how would Watts define the art of housing prediction?</em></p>

<p><em>"Educated luck," he said.</em></p>

<p>I find it ironic, that I can find quotes from Esmael Adibi, John Burns, and Walter Hahn from the 90s, but nothing from Gary. The "no one wants to hear doom and gloom" excuse doesn't work, because all three of the other economists have had a pessimistic opinion at various times. Granted, Walter Hahn has had his head in the sand more than once, Adibi has been overly optimistic in the 90s and too early with pessimism this cycle, and John Burns has been consistently cautious at the right times throughout his career. And, having worked for a homebuilder, I can say I never once saw any of Gary's economic reports used to determine the market. They used John Burns and Mark Boud's reports for the market outlook. I would imagine IR is correct, and if someone brought his report, they would be fired. Well... maybe not fired, if they brought it as a joke.</p>

<p>I love to bring this one up every time his name comes up.


</p>

<p><a href="http://www.ocregister.com/ocregister/money/abox/article_891975.php">Bullish on O.C. Home Prices. December 15th, 2005</a>.</p>

<p><em>Anyone waiting for a major spike in foreclosures to buy a discounted home should forget it, said broker Watts. "They're not going to see it," he said.</em></p>

<p>Two years later, with an ever increasing amount of foreclosures, OC will break records this month, and in the year to come. Check another one off in the wrong box for Gary.</p>

<p>So... until I see proof he called the last bust, then I am not buying it. At least he could be man enough, like Walter Hahn, and admit his head has been in the sand.</p>

You would think, someone with "advanced" studies in psychology, would recognize overly optimistic probability bias. I read a paper titled, <a href="http://faculty.washington.edu/agg/pdf/Gwald_AmPsychologist_1980.OCR.pdf">The Totalitarian Ego</a> today, and it reminded me so much of Gary, that it is <em>scary</em>. Don't let the scholarly paper scare you, it is a fun read. How can it not be, when the author cites Orwell and Vonnegut? Of course, a real economist will appreciate the Tversky and Kahneman citation. I wonder if Gary would?
 
<i>"They may do this to beat inflation as their money is in a tangible asset that can be sold with no tax consequence."</i><p>

If you sell an automobile, (personal property), for a gain, you are required to report the gain as capital gain and pay the requisite tax on the gain. If you sell an automobile for a loss, you may not deduct the loss unless you can show that the car was purchased as investment, (business), property.<p>

Nice, eh?<p>

Thanks for the thought, but I do not want to purchase any car(s) right now. But, if it wasn't tax season, I would be inviting myself to go with you to the auction.
 
awgee



Sounds right. They tax you on the upside and you can't deduct the loss on the downside. Most guys I know who play with classic cars do not show them as investments and simply sell at a profit (maybe after all costs of insurance, license, new parts) but do not report it as there is no escrow or way for IRS to track them. Not saying it is right but it is the way they do it. A couple of years ago DMV agents were walking around the Pomona swap meets watching for guys who"jumped title" by buying a car on Sat and reselling it on Sunday without paying sales tax or license. Guys walk around there with thousands of dollars in paper bags. Interesting little niche.



Enjoy!
 
I have access to the LA Times and OC Register archives - I couldn't find anything quoting Watts from the late 80s or 90s either. The only mention of Watts in the OCR is a '93 brief:





LAGUNA HILLS


"A new interactive visual display system gives new meaning to the phrase "Let your fingers do the walking" for potential homebuyers. Visual Listing Service allows real estate agents and the public to sit at five 17-inch computer screens and call up multiple pictures of homes in the Saddleback Valley. Buyers not only can specify price, location and other features but can "wander" through the interior, depending on how many views of the home are in the system. Designed by Realtor Gary Watts , the company is the result of five years of videotaping hundreds of homes that he showed to agents at weekly board meetings. The company will open the first of the year. Watts expects to have more than 3,000 properties in his data bank by the second week of January. "





<strong>Also found this interesting one from 2004:</strong>





"IRVINE To those who think Orange County's real-estate market is a house of cards that's about to fall in, Gary Watts says think again.





Home prices aren't going down next year, as several economists predict, the real- estate broker and economist said. They're going up.





Fifteen percent next year, he predicts, and because demand for homes will outpace supply for the next 15 years, prices could continue climbing through 2020.





<strong>"These people have the income. They're rich," Watts said. "People in Orange County are rich.""</strong>





I don't think my google-fu skills are quite up to graphrix's, though.
 
<p>In the early days Gary did a presentation with a lot of humor about once a year at what was then the Saddleback Board of Realtors ( forerunner of the South Orange County Board) with coffee and cookies by title companies. He got no press nor did he pass himself off as a "Guru". I do not believe that he was compensated at that time for his presentations. He also did his thing at some of the larger real estate offices. I don't think that in that era there would be much of a record since it was pretty much just a realtor putting on a simple presentation for other agents.</p>

<p>I would never have used him in my positions with the major builders. I think the press caught on to him in the mid 2000's and he became more known outside of the brokerage community.</p>

<p>I did enjoy his presentations but it was just one guy's opinion.</p>

<p>Enjoy!</p>

<p> </p>
 
It is possible the he could be right THREE times. The watch could be stuck at 1 o'clock on the day when we change the time back an hour from 2 am to 1am!
 
I can't help thinking somewhere along the line he realized there was money to be made in telling people what they want to hear, so he did.
 
<a href="http://www.irvinehousingblog.com/images/uploads/nov2008early/GaryWatts2008Forecast.pdf">Gary Watts 2008 Forecast PDF.</a>



This may be posted somewhere else, but I couldn't find it. Could this guy be any more wrong?
 
[quote author="IrvineRenter" date=1226147728]<a href="http://www.irvinehousingblog.com/images/uploads/nov2008early/GaryWatts2008Forecast.pdf">Gary Watts 2008 Forecast PDF.</a>



This may be posted somewhere else, but I couldn't find it. Could this guy be any more wrong?</blockquote>


No... seriously, he really couldn't be any more wrong than he was, and in fact he is/was the wrongest of the wrong. Oops... looks like someone hasn't paid their web designer to <a href="http://www.impactre.com/Forecast.html">update their page in a while</a>.



I really wonder how those 2005 purchases worked out for him?
 
Granted this is just name coiningkidink, but the irony is delicious.





Turns out there is an NOD on a property on Apache Dr. in Wagon Wheel and the home debtor's name is Gary Watts. he-he. ;-P
 
That is <em>the</em> Gary Watts.



Ouch! That is what you get for getting high off your own supply, and buying a home in 2005 with only 10% down. Now instead of Kool-Aid, you just are underwater. I wonder if that is an option ARM. Oh this is ironic.
 
[quote author="graphrix" date=1237935084]That is <em>the</em> Gary Watts.



Ouch! That is what you get for getting high off your own supply, and buying a home in 2005 with only 10% down. Now instead of Kool-Aid, you just are underwater. I wonder if that is an option ARM. Oh this is ironic.</blockquote>




<strong>NO WAY! Are you cereal? THE Gary Watts? Of "The Economy in Orange County is strong, so home prices will not fall" fame? The "Will you buy my DVD?" Gary Watts? NOD?!?! WHOA! Get out!</strong>







Personally I like Wagon Wheel, but I can not imagine a big real estate cheese like Gary Watts living there. Is it an investment property? A flip? A home for an offspring? What gives?
 
I'd like to know how you know for certain that it is him, I believe you, I am just wondering. I would also like someone at the Register to do a story on this, that would be so much fun! Maybe they should interview him again :wow:
 
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