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Housing PR Shampoo: Forecast, Revise, Repeat

One of the minefields of business is to predict the future. Few are particularly good at it, but its expected, wanted and needed by those who follow a particular industry.

The National Association Of Realtors [1], who before the recent housing boom, was the go to source for housing market forecasts before the blogosphere taught everyone to question everything. Thats a good thing.

Technically things haven’t changed much. A trade group is forecasting market conditions, whose influence impact their members (otherwise they wouldn’t bother)The NAR is still issuing forecasts [2], changing their forecasts [3] and they are still being reported to the public as newsworthy stories. It seems like a straight press release [4] rather than a news story, doesn’t it?

One of the things that has always bothered me about NAR forecasts [5] is there doesn’t seem to be anything behind them, statistically speaking. A logic is presented, that when presented in the backyard bbq, makes everyone nod in approavl. Bad weather [6], poor consumer psyche, etc. Its simply sound bite driven. I have written about this before [7], but I guess it still bothers me.

Its one thing to project lower sales activity because of unseasonably cold temperatures keeping buyers indoors or vice versa, but that should be extrapolated through statistics and shared. Showing temperature against demand [8]. Something. It gets cold every winter, it gets warm every summer. If the stats are seasonally adjusted (I haven’t ever been able to find their methodology for this, can anyone provide some insight about this to me?), it would be simple enough to show a pattern.

Sorry for the whining, but I find this whole thing exhausting.

Here’s a possible 2-year NAR forecast pattern by month:

  1. Market is doing well: Release glowing forecast, revised with more glow
  2. Market is doing well: Release glowing forecast, revised with more glow
  3. Market is doing well: Release glowing forecast, revised with more glow
  4. Market is booming: Release glowing forecast, revised with more glow
  5. Market is booming: Release glowing forecast, revised with more glow
  6. Market is booming: Release glowing forecast, revised with more glow
  7. Market is doing well: Release glowing forecast, revised with same glow
  8. Market is doing well: Release glowing forecast, revised with same glow
  9. Market is cooling: Release glowing forecast, revised with same glow
  10. Market is cooling: Release glowing forecast, revised with less glow
  11. Market is falling: Release glowing forecast, revised with less glow
  12. Market is falling: Release glowing forecast, revised with less glow
  13. Market is falling: Release glowing forecast, revised with less glow
  14. Market is falling: Release glowing forecast, revised with less glow
  15. Market is falling: Revise forecast lower, revised with positive signs
  16. Market is falling: Revise forecast lower, revised with positive signs
  17. Market is falling: Release slightly negative forecast, revised with positive signs
  18. Market remains down: Release slightly negative forecast, revised with positive signs
  19. Market remains down: Release neutral forecast, revised with positive signs
  20. Market shows slight improvement: Release positive forecast, revised with more glow
  21. Market shows slight improvement: Release positive forecast, revised with more glow
  22. Market shows slight improvement: Release positive forecast, revised with more glow
  23. Market shows slight improvement: Release positive forecast, revised with more glow
  24. Market is doing well: Release glowing forecast, revised with more glow

Perhaps I am exagerating a bit, but I have spoken to many Realtors over the years who wish NAR would lay off a bit. In other words, speak to accuracy. I understand the need for public relations as an organization, but to have a “chief economist” or “senior economist” release warm and fuzzy straight public relations stuff is probably a disservice to their membership.

UPDATE: Check this simlar whining rant on Motley Fool. [9]