Lies, Damn Lies, and Housing Predictions
“Government statistics are often questionable and sometimes turn out to have been highly misleading. Unfortunately for policy makers, such errors are most likely to be severe at precisely the time that the economy is turning around.”
–Floyd Norris, “Doubting the Economic Data? Consider the Source”; The NYT (11/6/2014)
“It’s tough to make predictions, especially about the future.”
–Yogi Berra
Like economic predictions generally, housing predictions are notoriously unreliable for a host of reasons, starting with the fact that the future is inherently unknowable.
But, there’s one environment in particular where forecasters are apt to be the most wrong.
When’s that?
At market inflection points.
Trends . . . & Bends
So, when it comes to housing, you can safely ignore “the experts” when the market is shifting from a Seller’s market to a Buyer’s market, or vice versa.
That’s because so much of what passes for predicting — “forecasting,” if you prefer — is really nothing more than sophisticated extrapolation of current trends.
Or, to quote one more well-known maxim (aphorism?): “the trend is your friend . . . until the bend.”
See also, “How the Housing Market Shifts Gears”; “Housing Market Prediction 2013“; “Barron’s: ‘Home Prices Headed Up 7%“; “Predicting Home Prices in . . . 2022?!?“; and “2012 Predictions.”
