Risk of Bad Statistics: 99.7%

That's One Awfully Clear Crystal Ball

Smart Money magazine is running a piece ("Fishing for Housing Bargains") that profiles six housing markets nationally that now appear to be attractively priced.

To support that claim, the article purports to calculate the "risk of price decline."

The risk ranges from 3.1% for Omaha, to 25.4% for San Antonio; according to the author(s), the risk of a price decline in Pittsburgh (pictured above) is 12.0%

All six markets may indeed be good values.

But the idea that Smart Money (or anyone else) can precisely calculate the downside risk -- to .1%, no less -- is a hoot.

Save the $4 cost of the magazine -- and the 10 minutes it'll take you to read the article.

P.S.: As I like to tell my clients who ask for market projections: 'if you tell me what interest rates, unemployment, GDP, and housing inventory are going to be . . . I'll give you a reliable local housing forecast.'

Housing Headline du jour

"Home Prices May Fall Further"
--generic headline discussing the housing market

Whenever I see a "non-headline" headline like this, it reminds me of a colleague's comment about an ad for income property a few years ago. Along with the property's asking price, key stat's, etc. was this language: 'rents could be higher.'

To which my colleague riffed, without missing a beat: ' . . . and they could be lower, too."

So, yeah, home price may fall -- or, they may rise!

Sort of sums up the options.

P.S.: in the same vein, years ago National Lampoon ran a spoof of USA Today, which raised (lowered?) banal headlines to an art form. Example: 'Puppies . . Dogs of the Future?"