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.
High Hopes For Housing. May 15th, 2005.
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.
He expected it to happen within one year and span at least four years.
Watts further shocked the audience when he said values in some neighborhoods could plummet as much as 40 percent over that time.
Dave Knox, who was working in the title business, was at the event.
"I can't say I believed him," he said. "Nobody wants to hear that the party's over."
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.
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.
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.
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.
So how would Watts define the art of housing prediction?
"Educated luck," he said.
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.
I love to bring this one up every time his name comes up.
Bullish on O.C. Home Prices. December 15th, 2005.
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.
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.
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.
You would think, someone with "advanced" studies in psychology, would recognize overly optimistic probability bias. I read a paper titled,
The Totalitarian Ego today, and it reminded me so much of Gary, that it is
scary. 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?
