{"id":24491,"date":"2012-10-26T11:39:19","date_gmt":"2012-10-26T18:39:19","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=24491"},"modified":"2012-10-26T11:40:48","modified_gmt":"2012-10-26T18:40:48","slug":"checking-up-on-goldmans-bearish-2010-two-year-forecast","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/","title":{"rendered":"Checking Up on Goldman&#8217;s Bearish 2010 Two-Year Forecast"},"content":{"rendered":"<p>Readers may recall the following prediction from Goldman Sachs in June 2010:  <a href=\"http:\/\/seattlebubble.com\/blog\/2010\/06\/08\/goldman-seattle-home-prices-to-fall-22-more-by-2012\/\" title=\"Goldman: Seattle Home Prices to Fall 22% More by 2012\">Goldman: Seattle Home Prices to Fall 22% More by 2012<\/a><\/p>\n<blockquote><p><img decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png\" style=\"float:right; margin: 0 0 5px 10px; border:0;\" \/>Following their earlier collapse, house prices appear caught in a cross current. On the one hand, there are indications that prices may have bottomed. While alternative house price indices differ in details, they generally show that house prices have stabilized since early 2009.<br \/>\n&#8230;<br \/>\nWe predict the largest house price declines for Las Vegas, Seattle and Portland (Exhibit 6). While high home vacancy rates and steeply rising delinquencies are expected to push down prices in all three areas, some interesting differences emerge. Price declines in Las Vegas are projected to be front loaded, as negative price momentum and excess supply lead to near-term price declines, before valuation undershoots sufficiently to push up prices. For Seattle and Portland, the model projects back-loaded price declines as house prices currently look overvalued.<\/p><\/blockquote>\n<p>Here was my response at the time:<\/p>\n<blockquote><p>I don\u2019t have a PhD in finance, and I haven&#8217;t constructed a 6-variable model of home prices, but my estimates have been for only another 10-15% decline in Seattle area home prices, so I was a bit surprised to see such a dramatic call from Goldman.<\/p><\/blockquote>\n<p>Now that 2012 is nearing a close, let&#8217;s see who was more accurate.<\/p>\n<p>At the time this prediction was made (June 2010), the Case-Shiller Home Price Index for Seattle <a href=\"http:\/\/seattlebubble.com\/blog\/2010\/08\/31\/case-shiller-tax-credit-out-with-a-whimper-in-seattle\/\" title=\"Case-Shiller: Tax Credit Out with a Whimper in Seattle\">stood at 146.83<\/a>.  At its lowest point this year (February) <a href=\"http:\/\/seattlebubble.com\/blog\/2012\/04\/24\/case-shiller-yet-another-new-low-as-winter-wraps-up\/\" title=\"Case-Shiller: Yet Another New Low as Winter Wraps Up\">it was 128.99<\/a>.  That&#8217;s a drop of 12.2%&mdash;almost dead center of my 10%-15% prediction and nearly ten points less than Goldman&#8217;s call.<\/p>\n<p>I don&#8217;t know how Goldman Sachs&#8217; house price model managed to suggest such a large drop, but local economic fundamentals did not support another 22% drop between 2010 and 2012 any more than they suggested continued home price increases in 2007.<\/p>\n<p>Sometimes there is such a thing as over analyzing a problem.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Readers may recall the following prediction from Goldman Sachs in June 2010: Goldman: Seattle Home Prices to Fall 22% More by 2012 Following their earlier collapse, house prices appear caught in a cross current. On the one hand, there are indications that prices may have bottomed. While alternative house price indices differ in details, they&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[206,8],"tags":[61,678,14],"coauthors":[],"class_list":["post-24491","post","type-post","status-publish","format-standard","hentry","category-features","category-stats","tag-fundamentals","tag-goldman-sachs","tag-predictions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Checking Up on Goldman&#039;s Bearish 2010 Two-Year Forecast \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Checking Up on Goldman&#039;s Bearish 2010 Two-Year Forecast \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"Readers may recall the following prediction from Goldman Sachs in June 2010: Goldman: Seattle Home Prices to Fall 22% More by 2012 Following their earlier collapse, house prices appear caught in a cross current. On the one hand, there are indications that prices may have bottomed. While alternative house price indices differ in details, they...\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png\" \/>\n<meta name=\"twitter:creator\" content=\"@The_Tim\" \/>\n<meta name=\"twitter:site\" content=\"@SeattleBubble\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The Tim\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/\",\"url\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/\",\"name\":\"Checking Up on Goldman's Bearish 2010 Two-Year Forecast \u2022 Seattle Bubble\",\"isPartOf\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png\",\"datePublished\":\"2012-10-26T18:39:19+00:00\",\"dateModified\":\"2012-10-26T18:40:48+00:00\",\"author\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f\"},\"breadcrumb\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#primaryimage\",\"url\":\"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png\",\"contentUrl\":\"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png\",\"width\":\"278\",\"height\":\"530\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/seattlebubble.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Checking Up on Goldman&#8217;s Bearish 2010 Two-Year Forecast\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#website\",\"url\":\"https:\/\/seattlebubble.com\/blog\/\",\"name\":\"Seattle Bubble\",\"description\":\"local\u00a0real\u00a0estate\u00a0news, statistics,\u00a0and\u00a0commentary without\u00a0the\u00a0sales\u00a0spin.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/seattlebubble.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f\",\"name\":\"The Tim\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/image\/37756956c11dcc50d2559761ffa5ee70\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g\",\"caption\":\"The Tim\"},\"description\":\"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.\",\"sameAs\":[\"http:\/\/SeattleBubble.com\/\",\"http:\/\/facebook.com\/is.totally.pointless\",\"https:\/\/x.com\/The_Tim\"],\"url\":\"https:\/\/seattlebubble.com\/blog\/author\/timothyellis\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Checking Up on Goldman's Bearish 2010 Two-Year Forecast \u2022 Seattle Bubble","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/","twitter_card":"summary_large_image","twitter_title":"Checking Up on Goldman's Bearish 2010 Two-Year Forecast \u2022 Seattle Bubble","twitter_description":"Readers may recall the following prediction from Goldman Sachs in June 2010: Goldman: Seattle Home Prices to Fall 22% More by 2012 Following their earlier collapse, house prices appear caught in a cross current. On the one hand, there are indications that prices may have bottomed. While alternative house price indices differ in details, they...","twitter_image":"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png","twitter_creator":"@The_Tim","twitter_site":"@SeattleBubble","twitter_misc":{"Written by":"The Tim","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/","url":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/","name":"Checking Up on Goldman's Bearish 2010 Two-Year Forecast \u2022 Seattle Bubble","isPartOf":{"@id":"https:\/\/seattlebubble.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#primaryimage"},"image":{"@id":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#primaryimage"},"thumbnailUrl":"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png","datePublished":"2012-10-26T18:39:19+00:00","dateModified":"2012-10-26T18:40:48+00:00","author":{"@id":"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f"},"breadcrumb":{"@id":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#primaryimage","url":"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png","contentUrl":"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2010\/06\/Goldman-Sachs-2012-Home-Price-Forecast.png","width":"278","height":"530"},{"@type":"BreadcrumbList","@id":"https:\/\/seattlebubble.com\/blog\/2012\/10\/26\/checking-up-on-goldmans-bearish-2010-two-year-forecast\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/seattlebubble.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Checking Up on Goldman&#8217;s Bearish 2010 Two-Year Forecast"}]},{"@type":"WebSite","@id":"https:\/\/seattlebubble.com\/blog\/#website","url":"https:\/\/seattlebubble.com\/blog\/","name":"Seattle Bubble","description":"local\u00a0real\u00a0estate\u00a0news, statistics,\u00a0and\u00a0commentary without\u00a0the\u00a0sales\u00a0spin.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/seattlebubble.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f","name":"The Tim","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/image\/37756956c11dcc50d2559761ffa5ee70","url":"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g","caption":"The Tim"},"description":"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.","sameAs":["http:\/\/SeattleBubble.com\/","http:\/\/facebook.com\/is.totally.pointless","https:\/\/x.com\/The_Tim"],"url":"https:\/\/seattlebubble.com\/blog\/author\/timothyellis\/"}]}},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p6wh0F-6n1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/posts\/24491","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/comments?post=24491"}],"version-history":[{"count":0,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/posts\/24491\/revisions"}],"wp:attachment":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/media?parent=24491"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/categories?post=24491"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/tags?post=24491"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/coauthors?post=24491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}