Margaret Lomas dismisses US doomster Jordan Wirsz's fresh claim of Australian impending property market crash
The Australian housing market is set to crash like the US housing market crashed following the sub-prime mortgage crisis, US property market doomsayer Jordan Wirsz has claimed in a new blog post.
Wirsz caused a stir in the Australian media earlier this year when he forecast Australian house prices to fall 60% over the next five years.
Despite being unknown in Australia and with no evidence to back his claims, they were reported on News Limited websites as a warning of a “bloodbath” to hit the Australian property market.
Little has been heard from Wirsz since then until his latest blog post, which claims that while that there are “very bullish signs” for the US housing market, the Australia’s property market is heading for a tumble.
“I’ve done a lot of research on the Australia real estate market, and in fact see some very significant signs that they are almost exactly where the U.S. market was in 2008… Who knew it could fall so much… Well, I think Australia is in for it in a big way. Stay tuned for more on that topic later. In the meantime, happy real estate hunting,” writes Wirsz on his blog.
But property investment adviser Margaret Lomas, who has read Wirz's latest blog and sparred with him in the past on Sky News, says she is finding "much more encouraging news [about the Australian housing market] from some fairly reliable sources".
"The September quarter showed some slow, albeit low, growth in many markets, as we carefully creep along, prudently buying, bargaining hard but keeping property values just about where they should be given the world economic outlook.
Lomas suggests listening to the "true experts" like Tim Lawless from RP Data, who "forecasts rising housing prices for the major urban areas of Australia" with the quarterly rate of house price growth over the September quarter forecast to be around 2% – "that's the strongest quarterly change since May 2010".
Wirsz suggests now is the time to buy US real estate and says that US housing investors are “living and dying with every new release of the home-builder data, home price indexes, and all the nonsense that is available to the average person” and should instead take a leaf out of Warren Buffett’s book and watch very little of the news, “if any”.
According to the September Case-Shiller index of 10 major US metropolitan areas and its 20-city index, properties prices rose 1.5% and 1.6% respectively, supporting a fractured recovery in the US housing market.
However, some of the states worst-hit by the sub-prime mortgage crisis, such as Cleveland, have only just moved past January 2000 prices.
In a Reuters September poll, 35 of 38 economists said the US market was recovering, but the pace of recovery is still painfully slow.
US house prices crashed about 35% in the wake of sub-prime mortgage crisis, but falls were greater in California and in south-west mortgage belts like Nevada.
According to a Home Builders Research report from June, the median resale price of home in Las Vegas, Wirsz's home town, was just $120,000 in June, though up 9.1% from a year ago. The average price of a house in Las Vegas was around $350,000 in 2007, according to the National Association of Realtors.
Wirsz claims to have achieved over $500 million in sales and advised Fortune 500 CEOs about real estate investments.
He describes himself as a “licensed realtor, entrepreneur and businessman based in Las Vegas, Nevada”.
“By the age of 25 Jordan founded a private capital lending firm which grew to a size of approximately $150 million under management. The firm financed the developers and construction companies in the booming Las Vegas real estate market,” says his website.