Matthew Gardner Predictions vs. Reality

Incredible. Even with the major continuing job losses and home prices in unabated decline, Matthew Gardner continues to spread the word of a recovery for Seattle in 2009.

Here are a couple of slides from a PowerPoint presentation Matthew Gardner used in a class for local real estate agents on the 19th:

Gardner 2009 Forecast

Gardner 2009 Forecast

Jobs will lead to a housing recovery in 2009? Really? And how exactly are foreclosures going to “continue to slow,” when the latest data shows that they haven’t even started to slow?

Let’s take a look at Matthew Gardner’s recent performance when it comes to accurately forecasting the local market…

Gardner Forecast: Prices +5 to +9%
Case-Shiller: +0.5%
King Co. SFH: -1.1%

Gardner Forecast: Prices 0 to -5%
Case-Shiller: -11.2% (Nov.)
King Co. SFH: -7.2%

Here’s a visual representation of Matthew Gardner’s predictions for 2007 and 2008 vs. the Case-Shiller index:

Matthew Gardner vs. Case-Shiller

Like I said about J. Lennox Scott and Dick Beeson: I’m not going to tell you who you should or shouldn’t trust when it comes to predictions about the local housing market, but I do think everyone should at least be equipped with all of the data when making such a decision.

0.00 avg. rating (0% score) - 0 votes

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    Angie says:

    Time will tell if Mr. Gardner is right or wrong.

    Anecdotally, I’m noticing a whole lot more “pendings” on listings lately, having been trawling for our next fixer-upper. I’ve been looking at listings in SE and N Seattle for 3 bedroom places under $300K–and there are a whole lot more of them, in generally better shape, than in the past few years. As I’ve said here in the past, there’s still a *lot* of pent-up demand, people who want to buy a house but thought things were out of control during the run-up (not unlike much of the audience here, of course). Unemployment is at 7% but that still means that >90% of people are employed. It may be that people who have been biding their time and are still secure are coming out of the woodwork and looking for relative bargains.

    And, not to gossip or anything, but I hear tell that SB’s own Biliruben is in the market again. Surely, a dedicated bubblehead jumping back into the housebuying game is a harbinger of the turnaround.

  2. 2
    wreckingbull says:

    Jobs will lead housing out of the mire

    I can’t believe I just read this. Do people really pay this guy for advice?

  3. 3
    Robert says:

    Also – how is the unemployment calculated?

    What would be the unemployment rate if they counted all people who want to work even though they were not successful in finding a job even for say 1 year? or 2 years?

    Also how many jobs really evaporated out of Seattle market? Or will evaporate? The unempoloyment figure the way it is designed now – kind of does not show the whole picture – at least this is my understanding.

  4. 4
    The Tim says:

    Here’s a good post that goes over some of the questions you are asking about the unemployment statistics: A Visual Guide to the Financial Crisis:Unemployment Rates

  5. 5
    geon says:

    Price appreciation back in 2010! That bodes well for buddy’s friend who just recently had $300K wiped off his $700K mortgage from Countrywide, plus 3% int. rate. Well, this is according to him.

    Makes me want to go out and buy a house. :(

  6. 6
    patient says:

    Amazing, I have never come across an industry that is so eager to self-destruct as the real estate industry, simply amazing.

  7. 7
    DrShort says:

    There’s just as much “pent up supply” to go with your “pent up demand”. Craigslist rentals section is filled with sellers who have given up trying to sell and will rent at a loss.

    The January sales and price data will be UGLY when it’s released in a few days.

    This market is gonna get worse before it gets better.

    + Jobs are weak and getting worse
    + Lending is tight
    + Buyers are very nervous.
    + Foreclosures are accelerating.
    + Stock market has eliminated wealth.
    + Influx of buyers from CA with equity to spend are gone.

    Why is this guy so positive again? I’d love to hear his rational.

  8. 8
    Ray Pepper says:

    Geon its happening everyday with Countrywide. In Calif I know two people who had 240k and another almost 300k wiped away. The deal of a lifetime for Homeowners is here and it will continue in huge numbers. Educate yourself consumers! They do NOT want your home………

  9. 9
    Buceri says:

    Hey; even the Detroit Lions had cheerleaders this season.

  10. 10
    geon says:

    Yeah, I woke up a couple times last night just thinking about it. My emotions, at this time, run from rampage to embarrassment.

  11. 11
    shawn says:

    It is hard to accept that “sometimes” being optimistic (especially overly optimistic) can be a bad thing. When people like Matthew Gardner tell people things that are not at all likely to occur, and other sources are telling them things that more closely follow logic and reasoning, far too many folks want to put their faith in Matthew Gardner.

    What people need is some good healthy skepticism.

  12. 12
    Objectivity says:

    Sounds like Gardner has an office waiting for him at the NAR.

    I hope people like this are held accountable for their massive shortsight, and pathetic advice in a couple years. Like Gardner himself, that hope may be overly optimistic.

  13. 13
    Markor says:

    I’ve seen a couple sites that claim that unemployment is really 16+% now, and at least twice as high as it was at this point during the Great Depression (the last one). Unemployment, which reached a reported ~25% in the 1930s, was reported a lot more stringently then than it is now. (Nowadays, many people who want to work but can’t find work are not reported as unemployed.) This might be a good discussion topic for SeattleBubble.

    Belay that; saw some posts below.

  14. 14
    Ray Pepper says:

    Objectivity do you really believe the NAR will still be around (in its present form) in 5 years? Furthermore the MLS system as we know it. The NWMLS currently has 25,935 Agents as of Dec 2008. From a HIGH of well over 30k I say we will have less then 20k (Actively working) by the end of this year. The collapse of the MLS system and the NAR is inevitable. A new form of Buying and Selling utilizing FACILITATORS representing both Buyer/Seller is the Future of Real Estate. Watch and Learn friends. Change is good!

  15. 15


    Dr. Doom was the key reknown WEF speaker now, two years ago he was a crackpot there. My how times have changed. I remember around 2007 I’d bring up Dr. Roubini on this blog and many of the totally “overally optimistic bloggers” called me a “wild eyed survivalist type”…..not anymore….lol.

    By the way, where are the pink pony bloggers that used to troll SB anymore? They aren’t online anymore, they’re too worried about all their RE investments gone sour on them?

    Here’s some of his comments last Saturday [and yes pink ponies, Seattle is impacted by this global mess too, also, Dr. Roubini always tries to down play his negativity, so his real opinion on reality is likely much worse than he publically states]:

    “The consensus is catching up with me, but it’s still behind,” Roubini said in an interview in Davos. “I don’t know what some people are smoking.”….”“The risk of a near-depression shouldn’t be underestimated.”

    Roubini, who’s now working on a book about the crisis, says he takes no particular pleasure in his role as Dr. Doom or the attention it brings him.

    “I’m not a permanent bear,” he says. “I’ll be the first to call a recovery, but I just don’t see it yet, and it’s getting uglier.” ”

    the rest of the Bloomberg article:

  16. 16
    gitano says:

    This is the article in

    “That defines the sometimes-overlooked, historically blue-collar South Beacon Hill neighborhood, where buyers can find a home in good condition for $350,000-$450,000, minutes from downtown Seattle.”

    They are touting that 350k to 450k is a great deal! What does a blue collar job pays these days?

  17. 17
    patient says:

    geon wrote : “That bodes well for buddy’s friend who just recently had $300K wiped off his $700K mortgage from Countrywide”

    This is your tax payer dollars at work. You and me and our fellow americans are paying this guy $300k. BoA/Countrywide received $20b from TARP. One of the requirements the gov. is putting on the banks that receives TARP funds is to do deals like this with borrowers. If you don’t like it, let your senators know. I donno about you but I’m not really thrilled about giving the irresponsible people who caused some of my co-workes to loose their ability to support their families last week (layoffs) 100s of thousands of dollars each.

  18. 18
    patient says:

    lilypad, if you are reading the comment above it is in no form aimed at you. You are in trouble because you lost your income due to sickness, that is very different and you have my full sympathy. You were also not looking for any giveaways, I really hope things works out for you and wish you a speedy recovery, healthwise and financially.

  19. 19
    geon says:

    Right. These folks spent like there was no tomorrow, boats, ATVs, etc. I ‘m sure they’ll continue to spend.
    I recently bought a couple flat screen TVs and still have Buyers Remorse, there’s a couple grand I could have counted in the bank.

  20. 20
    Groundhogday says:

    “Time will tell if Mr. Gardner is right or wrong. ”

    Or we could use our noggin’ right now and realize that this guy is talking nonsense.

  21. 21
    The Tim says:

    Happy Groundhog Day!

  22. 22
    b says:

    I think the real point here is to never trust someone who Randomly capitalizes Words in their Shitty powerpoint PresenTations.

  23. 23
    b says:

    “Pent up demand” goes away once the economy does. What was once “pent up demand” to buy a home at the right price is now “are you kidding me? I hope I have a job next year.”

  24. 24
    Mikal says:

    How many people are retirees on social security that are not included. They were included as unemployed then. Women generally weren’t working like they do now which changes all contex of any comparison to the depression.

  25. 25
    Jillayne says:

    b, I caught that, too.

    Tim, where was this class? Next time maybe one of us should go and ask him questions such as how he’s coming up with these predictions, which may actually harm the home sellers hoping for stabilized prices.

    Sounds like he may work more with builders than residential resale but I honestly don’t know for sure.


    “After receiving degrees in Economics and English at Oxford, Mr. Gardner acted as a Land Agent for Cluttons, an international firm of Chartered Surveyors where he advised clients such as the British Royal family and the Church of England in their real estate matters.

    Matthew is particularly passionate about urban residential development and is currently advising a number of firms with their planned and proposed developments. Mr. Gardner is a regular lecturer in real estate forecasting & economics and currently sits on the Board of Trustees of the Washington State University Center for Real Estate Research.”

  26. 26
    Angie says:

    Hee! It does have that sort of A.A. Milne feel about it, doesn’t it? The Real Estate Market is like a Bear wedged in Great Tightness.

  27. 27
    EconE says:

    I find it interesting how RE bulls think that lowering borrower’s principal amounts will “buoy” the sinking market.

    How many sellers can afford their own homes at their currently overinflated prices?

    Not many?

    Things that make you go “hmmmmmmmmmm.”

  28. 28
    Groundhogday says:

    I’ll have to watch the Bill Murray DVD tonight (the inspiration for the name).

  29. 29
    SteveH says:

    “They were included as unemployed then” referring to people on Social Security during the depression? Come on, better get your facts straight:

    August 14, 1935 The Social Security Act (H.R. 7260, Public Law No. 271, 74th Congress) became law with the President’s signature at approximately 3:30 p.m. on a Wednesday.

  30. 30
    Jbeans says:

    Uh, yeah. We have a six-figure income and that’s about the price range we’d be comfortable with.

  31. 31
    lilypad says:

    Thank you for your thinking of me, but don’t worry. I didn’t take offense at it. We’re the ones who’ve been trying to meet our obligations, not get a free ride, remember? :-) We were just talking today about how to come up with the cash to pay off our 2nd mortgage, since it is unfortunately with a different lender than our first (the 2nd mortgage lender was actually the holder of both at the beginning and then sold off the first). so although they are responsible for signing off on the loans in the first place, if we did a short sale they’d probably get nothing. I got a good chuckle over that, but unfortunately, since the 2nd is unsecured debt, they could still come after us for it if we foreclose on the first. That’s why we were brainstorming how to pay it off. I’m sure no one will be giving us $200,000 free, but we’re not asking for it anyway!
    On a side note, our house is officially off the market now and I’ve heard from about 20 agents, cold-calling me at all hours trying to get me to relist with them and most not taking a firm “NO” for an answer. It is incredibly annoying and when I called the NWMLS to complain that my home number is being passed out freely to every agent in town in the form of a “dropped” list, I was told since I’m not their client—my listing agent is—they can’t help me and don’t really care if I’m upset or not. Could someone please start a blog called and we can all share our horror stories.

  32. 32
    singliac says:

    I have a completely unrelated question. If you buy a house and pay 20% down, it is my understanding that you don’t have to buy PMI. Say that your house depreciates 10% in the next year. You now have a mortgage for 90% of the house’s value. Do you have to buy mortgage insurance now? If so, how is the value assessed? Is it up to the lender to determine? Thanks in advance!

  33. 33
    Herman says:

    You are right, and I hate them so. Why am I working for it?

  34. 34

    Why is this guy so positive again? I’d love to hear his rational.

    Oh, I don’t know, maybe his livelihood depends on a frothy housing market?

    Same as every other real estate shill. The suprising part is not what the say but the people actually listen. Do people ask the sales manager at the dealership whether it’s a good time to buy a car? Lemme guess the answer.

  35. 35
    DaveyDave says:

    It is one of the best movies ever made…

  36. 36
    The Tim says:

    And the last line in is pretty appropriate to the subject matter here…

    “Let’s live here. We’ll rent to start.”

  37. 37
    Jillayne says:

    Hi singliac,

    No, the lender couldn’t come back and ask you to buy PMI after the house depreciates.

    Consider that if you decide to refinance after the house depreciates, you would be asked to pay for PMI at that time.

    Home value is assessed using an appraisal ordered by the lender.

    Remember, underwriting guidelines are fluid right now and are always subject to change in today’s market.

  38. 38
    what goes up must come down says:

    Well as they say there is a sucker born every minute.

  39. 39
    singliac says:


  40. 40
    TheHulk says:

    Maybe we can just redirect from to SB lol. While we are at this, we could add swindling investment bankers, corrupt loan officers, disgusting ratings analysts and rotten “jingle mail” equity vultures to that list.

  41. 41
    lilypad says:

    Well, now that it’s morning (and no agents have called me yet!), I feel bad about my comments—of course, there are many good agents who comment on this site.

  42. 42
    economist says:

    Why don’t you get your facts straight?

    The Depression started in 1929. Peak unemployment was 25% in 1933. The primary goal of Social Security was actually to get seniors out of the workforce.

  43. 43
    SeattleMoose says:

    Gardner is just another RE industry hack.

    A hungry stomach has no conscience.

  44. 44

    […] This may be the first time on record that I find myself agreeing with Matthew Gardner. […]

  45. 45

    […] Accurate insight from Matthew Gardner? Okay […]

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.