Housing Predictors Offer Sketchy Advice At Best

Housing Predictors Offer Sketchy Advice At Best


All those dire predictions for the housing market has plenty of consumers scared. Some people have refused to buy a house during this economy, condowaiting until things improve before wading back in. Others are seeing an opportunity to buy now and are reaping the benefits of that decision.

When it comes to predicting housing trends, much of the advice being offered isn’t always accurate. In fact, if you read some of the reports you’ll quickly notice a few problems regarding home values including:

Predictions are too generalized — Sure, foreclosures are way up in some areas but that doesn’t mean that every market reacts the same way. If there is an oversupply of homes, then prices will continue to drop while foreclosed homes in a tight housing market are likely to be snapped up quickly.

Local markets are too broad — Even within a metropolitan area, selling trends can vary considerably. One municipality could be struggling while another could be thriving — local conditions including schools, jobs, and amenities will often determine just how strong a housing market is. Even within a single municipality, one development could be very attractive while another one not so.

The types of housing vary in price — Condos could be losing value while houses could be stable or even rise in price in certain markets. A market’s average home value decline could be weighted because one type of housing is dropping in price, skewing numbers for that ranch or colonial considerably.

Forecasts are too long range — predicting the future is difficult even with a thorough trend analysis at your disposal. Variables including government intervention, supply & demand, and local job markets can change a market’s course almost overnight.

Although a housing predictor can offer some information of value, they aren’t perfect. You’d do better tracking local trends yourself and drawing your own conclusions based on your personal analysis.


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About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".