Tuesday, April 28, 2009

Case of Case-Shiller dishes

(More from "The Next City" conference last weekend in Cambridge. I encountered blogus interruptus when my Mac laptop went on strike. I'm doing a series of notebook-dumping posts.)

Chip Case (right), Wellesley College economist and a founder of the Case-Shiller Home Price Index, was quite entertaining and not what you might expect from an academic in "the dismal science."

A Chip Case joke: "I had an economist call me the other day, said he couldn't sell his house and what should he do. I said, 'For Christ's sake you're an economist! It's worth -- I hate to tell you -- what someone's willing to pay for it!' "

Chip Case prediction on the commercial real estate: "It's the next shoe to fall." Every worker lost (and the U.S. job loss from December 2007 to March 2009 has been 5.1 million), creates an average vacancy of 180 square feet. "That stuff is still being held on the books of banks at par," he said.

Case response when asked about the so-called "American Dream of Homeownership"?
"It's largely bulls---." He went on to say, "Rental is better for a lot of people (unless they bought during a boom)."

John King, urban design writer for the San Francisco Chronicle: What about all the starter-home suburbs?
Case: I don't know. They're going to stagnate.

Me (buttonholing Case after his talk): What advice would you give to governments and policymakers on how to deal with stagnating starter home suburbs?
Case: I'd appoint a housing czar, inventory what's out there, what condition it's in, and start buying. Buy, and hold until it's needed.

He then acknowledged state and local governments have no money. "The only government with money is the one that's printing it."


Anonymous said...

Is there a full story about his comments somewhere or just the five completely useless sound bytes?

Anonymous said...

Somehow the term “czar”, as in the housing czars Mr. Case suggests be appointed at governmental levels, doesn’t sit well with me. Even Saint Obama uses that hackneyed term. Banking Czar, Automobile Industry Czar, and so forth. Rather than conjuring up an image of a dictator-led bureaucracy that will grow bigger and bigger and require more and more tax dollars, why don’t these guys propose the type of leadership that will at least have the appearance of being taxpayer-friendly and solution-driven?

What’s wrong with appointing guardians rather than czars? Or maybe even sentinels?

Anonymous said...

"In any government bureaucracy, they are not working for you but for the mythical blob called the 'public sector' which is really nothing but a stash of stolen cash divided among the robber class" Llewellyn H. Rockwell Jr.

BruceMcF said...

Anonymouse#1, you'll note that these are notes that Mary Newsom took, of what Case said during a Conference. It is, IOW, primary source material, not copied and pasted from elsewhere.

The name of the conference is give, the name of the speaker is given, the internet provides tools to see if anyone else has anything more.

Mary said...

Yes, Case sounds entertaining and it's an entertaining post.

I've heard of Homeownership not being the best thing for some people. For one thing, it ties you down.

I'd rather the government not buy suburb real estate inventory. If it's a good investment, let the private investors do it. I suppose Case is half jesting. That's what makes it entertaining.

consultant said...

He right.

Mary Newsom said...

To anon 4/28 8:51 PM: Sorry, only the sound bites. It was a presentation at a conference. I think he had a powerpoint but his remarks weren't on it. You might find more info at www.lincolninst.edu, the web site for the Lincoln Institute of Land Policy.

And to anon 9:01 PM, I agree, "czar" is overworked. If you know minimal Russian, it's misspelled. But it's certainly an eye-catching, sound-bite-friendly sort of word.

Anonymous said...
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Anonymous said...

Case works for S&P, which rated garbage mortgage paper as Triple-A for years. Now he wants the government to print money to buy all that garbage at 50-75% above market prices (so that S&P's ratings aren't discovered to be the frauds that they are). Ask Zimbabwe how well printing money works. Mr. Case, you are certifiably insane!

Anonymous said...

Mary, since you answer a comment about the word "czar", is it reasonable to ask why you have NEVER - not once - answered a comment asking how you propose to PAY for any of your proposals?

The US is $12 trillion in debt, Obama's budget plan adds another $10 trillion through 2019, plus the feds have backstopped another $10.4 trillion and there are $53 trillion (minimum) in unfunded future liabilities.

I will leave it to you to do the math to figure out what each US household's share of those debts is. And then I will ask you:

Where is the money going to come from? This is a far more serious issue than the use of the word "czar", and I hope you'll agree it deserves your attention.

Where is the money going to come from?