Sunday, June 04, 2006

Do as I Say, Not as I Do

I saw this mentioned over at the Ben Jones blog.

Apparently, Douglas Duncan, chief economist for the Mortgage Bankers Association, is a house owner recently turned renter:
"I'm going to rent for a while," said Douglas Duncan, who expects "significant reversals" in regions that have enjoyed strong home price appreciation, including Washington, D.C., Florida and California. He plans to sell his suburban Washington home, which has tripled in value since he bought it a dozen years ago, and move into an apartment.

Acting on his gut has served him [Duncan] well before. In 1988, as the economist was moving to Washington, he went to look at a house that was for sale. Three couples were already there. They started a bidding war in the living room. "This is irrational behavior," Duncan remembers thinking. He decided to rent. Shortly afterward, the market crashed. In 1993, he decided it was a good time to own. The price he paid for his house was about a third less than the previous owner, who had lost it in a foreclosure sale.

It's a human temptation to stay in the game until the last moment. But Duncan... doesn't seem to feel it.
This is the same chief economist for the Mortgage Bankers Association who routinely publically pumps up the market and even pushes "toxic" loans on the masses including this new time bomb (check out GetStucco's comments about it).

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