2015 Housing Prediction

Advice to Prognosticators

I'm drafting my 2011 letter to clients now, which seems like a good time to recall this (anonymous) advice to prognosticators:

"The ideal time frame for predictions is 2-4 years out. That's immediate enough to compel people's interest, but distant enough that if you're wildly off the mark, no one will remember."

That may work for stock market or global warming predictions, but I doubt I can get away with that in my 2011 client letter.

Which leaves Plan B: simply extrapolate current conditions.

In fact, the vast majority of housing market predictions I've seen -- this year and in previous years -- do just that.

In the case of today's housing market, that means a continued soft market, characterized by skittish Buyers worried about their jobs and the risk of (further) home price declines.

Meanwhile, Sellers need to price and market aggressively to stand out from what is still a high inventory of homes for sale.

Housing "Buy" Signal

Contrarian Indicators -- Housing Market Edition

If you like contrarian indicators, here's a good one, courtesy of today's New York Times:

"Housing Fades as a Means to Build Wealth, Analysts Say"

--headline, NYT (8/23/2010)

Or as Barry Ritholtz puts it, "the time to be an über-bear on Housing (or anything, really) is before the collapse — not afterwards."