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Three Reasons Why I Ignore Housing Market Experts
Posted By Jim On 11/07/2007 @ 5:54 pm In The Home | 7 Comments
My friend sent out an article today about how Baltimore is predicted to see its housing prices fall 27.8%  in the next five years. 27.8% over five years is approximately 5% each year for five years… that’s the prediction. I think predictions like that are worthless and why I generally ignore them.
If you can predict the future with absolute certainty, why couldn’t you predict we were going to enter a slowdown in 2006 back in 2003? The market’s been somewhat slow for over a year now, so why didn’t we get some advance warning? The reason why is because you can’t predict the future. You can make an educated guess about what will happen next year, maybe the year after, but five years? C’mon now.
Wouldn’t you like to get one TV? What about see your name in the newspaper or magazine? Of course you would and so do experts. That’s why they will look at the data and why a lot of them will come to the same conclusions. When the market’s hot, it’s blazing hot. When the market’s cold, it’s sub-zero. Experts are likely to say those things because that’s what will get them on television or into magazines and newspapers.
Do you have any idea who said the housing market was sizzling hot right before it tanked? Probably not, that’s because no one keeps track and no experts are ever called out when they’re wrong. When things go sour, some CEO gets canned. I bet they wished they had these experts tell them that subprime was going to go into the toilet and their SIV’s were going to get them axed (though they both received handsome paydays).
What do you think of all the housing doomsday experts? (the ones that do scare me are the experts talking about the dollar and the exchange rates, so I can’t claim total rationality, I mean the Canadian dollar is worth more than the US Dollar! Insanity!)
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 housing prices fall 27.8%: http://money.cnn.com/galleries/2007/fortune/0711/gallery.real_estate.fortune/5.html
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