Nov 4, 2007
Goldman Sachs analyst’s dire prediction for California housing
What James Fotheringham knows which other folks don’t know?
In a recent research note, analysts at Goldman Sachs said they believed these loans pushed California home prices to levels 35% to 40% higher than justified by other fundamentals. “We expect home prices to return to normalized levels,” wrote James Fotheringham and his colleagues at Goldman.If Goldman is right, the typical home-owning household in California has about $200,000 less in home equity than it thought it had. Instead of living in a home that’s worth $589,000, it’s probably worth $380,000.
Either his clients are going to place some wrong bets or we are going to see tough times in California.
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