Should You Believe The Pundits?

I received the following from a mortgage professional at Wells Fargo on Wednesday.

Tracking the Track Record

What the ‘Experts’ Say about Housing Prices

“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.”
- Time Magazine 1947

“Houses cost too much for the mass market.  Today’s average price is out of reach for two-thirds of all buyers.”
- Science Digest 1948 (average price at the time: $8,000)

“The goal of owning a home seems to be getting beyond the reach of more and more Americans.”
- Business Week 1969 (average price at the time: $28,000)

“The era of easy profits in real estate may be drawing to a close.”
- Money Magazine 1981

“If you are looking to buy, be careful.  Rising home values are not a sure thing anymore.”
- Miami Herald 1985

“Most economists agree …a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was …”
- Money Magazine 1986

“We’re starting to go back to the time when you bought a home not for its potential money-making abilities, but rather as a nesting spot.”
- Los Angeles Times 1993 (Note that 1993 was the absolute low-point for real estate values in Los Angeles. Prices have sky-rocketed since, but are weak recently.)

“Financial planners agree that houses will continue to be a poor investment.”
- Kiplinger’s Personal Financial Magazine 1993

“A home is where the bad investment is.”
- San Francisco Examiner 1996

I came across this article in Newsweek a few days ago. John Talbott, apparently a housing expert of some sort because he predicted a few years ago that housing prices would decline, believes that prices will decline to 1997 levels. Talbott figures home prices will return to 1997 levels, since that was the year in which many of the aggressive lending practices, such as interest-only home loans, really began to take off. Please, quickly, someone throw a net over this guy.

Barring a horrific (God forbid) terrorist attack and a deep, long recession, we can add Mr. Talbott's prediction to the list above.

What do you think? Please comment.