Thursday, February 23, 2006 | Real estate economists and analysts often remind me that they don’t have a crystal ball.
I decided to find someone that does.
Lezlie Bernal is a psychic entertainer, who said she has had the ability to see into the future ever since she was a child. Bernal spends her days donning a gypsy costume, setting up her crystal ball – complete with glass beads and atmospheric dry ice “smoke” – and advising clients at private and corporate consultations.
Unlike most of the analysts I talk to, Bernal’s very specific in her predictions. She claims to be able to advise clients on the finer points of their business transactions. That’s an ability that she said leads heavy-hitting CEOs and company presidents to line up for hours just for a quick consultation with her.
With Southern California’s real estate market teetering on the brink of possible collapse, and homeowners biting their nails in anticipation, Bernal said she knows exactly what’s coming next.
“The market is going to continue to drop, pretty drastically. We’re going to have this downhill drop for a period of time, and then everybody is going to go ‘Oh my God, it’s dropped so low, now it’s time to buy.’ Then it’s going to rise again, sharply, and it’s going to go right back up.”
That was Bernal’s overall prediction for San Diego’s real estate market. Asked to elaborate, she gazed into the near distance, her eyes taking on a misty hue, before coming back with almost alarming precision.
“It’s going to continue to drop for the next nine months – nine months to a year – then, after that, it’s going to zoom back up sharply, when everybody gets in a feeding frenzy,” she said confidently.
Bernal also said that during that drop, she sees prices declining by 60 percent.
Wow.
That’s the direst prediction I’ve heard yet. It even surpasses the pessimism of Stephen D. Cauley, director of research at the University of California, Los Angeles Richard S. Ziman Center for Real Estate. He predicted back in January that San Diego’s home prices were going to fall by 15 percent over the next two years. None of his colleagues believed him. Maybe they will now.
Cauley, along with other prominent California economists, also expressed worry about San Diego’s downtown condo market. Inventory’s up so are the cancellation rates on preconstruction properties and the first condo project to falter has already been put up for sale in Little Italy. Downtown’s a market that also worries Bernal.
“The people that bought downtown, when it was looking really good, their intent was financial gain. It doesn’t look like that’s going to give them what they were looking for initially,” she said.
What really worries Bernal, however, and what she said she has seen in her predictions, is the lack of affordable housing in San Diego. This is a topic that I have covered and that has also been looked at by Rich Toscano, a Voice of San Diego columnist. Bernal said the lack of affordable housing in San Diego is the biggest problem she can see impacting the area in the future.
“You need the housing, but at an affordable rate. It would do them (the average person) a lot better. You wouldn’t have to have two incomes to support it. Overall, it would be a lot better for the economy.”
Developers take note.
As for the worries of Chris Thornberg, senior analyst at the University of California, Los Angeles that a major shock could send San Diego’s housing market into freefall, Bernal wasn’t too concerned.
She said any such shock, such as a serious environmental disaster or a terrorist attack, would not have much effect on the area’s home values. She hasn’t seen any such event in San Diego’s future anyway.
“Even if we had something occur, we would rebuild it. It’s location, location, location and this is a prime location,” Bernal predicted.
Another of Bernal’s predictions was that the next part of San Diego to experience a boom will be Chula Vista. She said growth there will be “outstanding.” This growth will boost the city’s finances, she said and the South Bay will light up like never before.
Bernal’s last prediction regarded Mission Valley and the thwarted Chargers stadium deal. The Chargers want the city to give them the land under Qualcomm stadium to build a new stadium along with some 6,000 condos. But Building any more in Mission Valley would be a bad idea, Bernal said.
“Because people are the way they are, they will want to build there, but honestly, it’s not a wise move,” Bernal said.
“They will just be adding problems to problems,” she added.
It’s doubtful that real estate bubble watchers and industry professionals will pay much heed to Bernal’s predictions. A fancy crystal ball and some colorful glass beads don’t go very far towards convincing the data devotees of the real estate world. But in the gambling arena of real estate investment, sometimes it’s fun to take a less serious view of predicting the future of the market.
And, after all, you never know.
Lezlie Bernal, the Party Psychic, is available for individual readings, functions and corporate events in San Diego, Orange County, Riverside, Palm Springs and Las Vegas. For more information, go to www.partypsychic.com, e-mail
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