Helmut and the winds of change

Just a couple of BC housing market forecasts courtesy of Helmut Pastrick, the Chief Economist of the Credit Union Central of British Columbia. This first one from a CBC news story, March 17th 2008:

 A report by the Credit Union Central of British Columbia predicts housing prices will continue to rise by as much as 10 per cent this year and as much as seven per cent in 2009.

Lower mortgage rates, a tight labour market, high income growth and rising in-migration all point to continued high sales volumes and price rises, according the CUCBC’s chief economist Helmut Pastrick.

..and From today’s Globe and Mail, August 20th 2008:

The housing market will grow even weaker next year, Mr. Pastrick predicts.

The downturn in new construction will last through to the Olympics, and housing prices, down marginally from their peaks early this year, are likely to drop by 10 per cent before the market rebounds, he said. All told, British Columbia looks set to turn in weaker growth than the national average in 2009 after years of outperforming most of the rest of Canada.

A few weeks ago we posted a similar comparison of changing market outlook quotes from Cameron Muir, Chief Economist for the BC Real Estate Association.

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jesse
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jesse

"housing prices will continue to rise by as much as 10 per cent this year"

"housing prices … are likely to drop by 10 per cent before the market rebounds"

That's a whopping 20% difference. I am sure reporters will ask Mr. Pastrick the tough question: why the 20% change in forecast? I've always had a soft spot for Pastrick. I really think he's trying to do a good job but he is so brutally bad at it. Kind of like a fat kid trying to run at the track in gym class.

Mold City
Guest
Mold City

These figures are absolutely guaranteed to be perfectly accurate within a range of plus or minus 100%

😀

ted
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ted

at least there was a few months between his changed position, not like the one week flip for muir.

Jesse, why they soft spot for Pastrick?

blueskies
Guest
blueskies

i remember the first time i got sick on the

roller coaster ….. not unlike this at all

jesse
Guest
jesse

"why they soft spot for Pastrick?"

I prefer to think he was trying his best and not a liar.

I wont put my real n
Guest
I wont put my real n

Jesse, why they soft spot for Pastrick?

Would it not be strange if Jesse had a "hard" spot for Pastrick?

patriotz
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patriotz

Trying his best not to look like a complete idiot, that is.

If any of the usual suspects comes out and says there may be declines of up to 10% it means they are expecting a major bust.

ted
Guest
ted

I prefer to think he was trying his best and not a liar.

Fair enough, I was just curious I don't know much about him other than his economic acuity seems to be lacking.

freako
Guest
freako

As much as I take exception to Helmut's "forecasts" I also believe he acts/extrapolates in good faith. However, such a flip flop without an explanation of flaws in previous analysis is disingenious at best.

Anonymous
Guest
Anonymous

Mr Pastrick's Resume

"Prior to joining Central in 1997, He spent many years with the Canada Mortgage and Housing Corporation in BC responsible for analyzing and forecasting the provincial housing market and economy."

No wonder, he worked for the CMHC, and for many years he has been "analyzing and forecasting"

SuperMan
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SuperMan

Before everyone piles on, it might be worth keeping in mind that Mr. Helmut's timing is considerably more spot-on than that of the bears who've been talking "fundamentals" for 4+ years. And I'll wager his timing on the turn to the upside will likely also be better – since he seems to be the kind of guy who actually waits for evidence of a market turn to make Grand Predictions.

VHB
Member
VHB

"since he seems to be the kind of guy who actually waits for evidence of a market turn to make Grand Predictions."

Um, Superman? Are you aware that 'prediction' means to foretell something **before** it happens?

I have been saying 'fundamentals' for 3 years. Prices have now started back on their journey to fundamentals. My prediction is coming true.

Pastrick on the other hand, 'predicts' that yesterday was Tuesday. Thanks for that.

WBC
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WBC

If the so called market analysts would actually know the direction the market is heading they would not yup about it to the general public, but would invest their own money accordingly. In other words they would be investors, not analysts. So expecting any kind of wisdom or accuracy from market analysts is about as pointless as expecting that bank's financial advisor (making 40k a year) actually knows what he is doing.

Timeless Stupidity
Guest
Timeless Stupidity
this is what satv think why we are diffrent from others. Most Dangerous “bubble”formation and avoiding tools 1. INTRESTS RATEs:people buy property by keeping in mind intrests rate,but when governments or banks hikes intrests rate to control inflation thats type of cheating with previous emotion,that scare all the buyers and investors,prices of property is not big deal because intrests rates help people to decide the size of monthly payments. CANADA : its good for canada that we have already seen the bubble blast its easy to protect our country by monitoring our condition now and we will be able to keep strong hold. 2.HURRICANES:When people see their homes are being drowned into water,flooding or in natural disaster that spoil the intrests to keep stability in confidence,and does not make futuristic approch. CANADA:we are not experiencing firm or predicted natural disaster… Read more »
SuperMan
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SuperMan

My prediction is coming true.

So by your own admission you're 3 years late "predicting" a market that moves in ~5 year cycles. That's not being "right", that's being a stuck clock.

Even after they milk
Guest
Even after they milk

Plus+ we are running out of land. Actually we ran out of land because all the rich people from everywhere came to live here after expo86.

Even after they milk
Guest
Even after they milk

The bulls know this is the end.

Stay tunned and see how nasty the fools will get.

Vansanity
Guest
Vansanity

Well said VHB!

The market has been out of touch with fundamentals for some time. We all knew this and saw this coming. This would have happened sooner if it wasn't for some slick new products (ie. 40 year zero down mortgage).

Predicting when these things will happen is difficult. Declines in price require a change in consumer confidence and their emotions. Nowadays, we're seeing a return to fundamentals without the emotional change, ala the saturation of units for sale, affordability is gone and the profit margins for speculators and developers are gone. Consumer's confidence and emotions will change soon enough and that's when the prices will see a drop. Interest rates will be the final piece of the perfect storm puzzle.

Lager not Logger
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Lager not Logger

Hasn't this market been going up for more like 8 years? That's 3 years over your approximate 5 year cycle.

I'll make a prediction: Both Helmut and Cam will continue making soft landing predictions all the way down, just like Lereah in the States.

Alistair Cookie
Guest
Alistair Cookie

"Trying his best not to look like a complete idiot, that is.

If any of the usual suspects comes out and says there may be declines of up to 10% it means they are expecting a major bust."

Agreed. I wonder how much of the pump in the market by the so called market experts was really based in fear of not wanting to be the outsider. You know, the guy/gal that 'Is always negative and gloomy'?

condohype
Guest

This is a great contrast of forecasts, but the flip-flop isn't exclusive to the economist quoted above. Economic forecasts very rarely pan out, especially when they're made by institutions with a vested interest in the outcome. It's bunk by nature. Banks and credit unions are conservative, follow-the-pack institutions. They all copy each other because nobody wants to be accused of not doing what the competition's doing.

The big issue is how these "expert" opinions keep getting published without challenge in the mainstream media. The kind of coverage we saw in March this year was absolutely brutal. Remember, this was the time when all things were pointing downward but the media weren't prepared to report it.

JR
Guest
JR

SuperMan

I predict that you will be right until you are wrong. On the other hand….

Drachen
Member

Arit

Off topic, but here's me on Aug 14th

"That photo of a wet gorilla costume with chicken guts spread on top is about as convincing as anything the bulls have, I’ll give you that."

And here's the, "independent researcher" who examined the, "bigfoot body" yesterday.

"the body, which had been encased in a block of ice, was discovered to be a gorilla suit."

browntown
Guest
browntown

hey nutsnaps! real estate on super cycle! interest rate going lower than prairie sunset thanx to eastern u.i. nutbaggers! even garth turner will get 5 yr for 4 percents! vancouver fundamentaly ran out of land after hillcrest drivein townhoused!

DonkeyXote
Guest
DonkeyXote

"this is what satv think: 1,2,3…"

Could you work a little harder on the 'think' part?

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