In my October Market Briefing, The Cromford Report’s resident expert, Tina Tamboer, talked about about the Phoenix housing recovery not being expected until 2015 “Memory Lane predictions”.
These are a combination of predictions that never happened or that were completely wrong. An example is the Phoenix housing recovery prediction you’ll see from this how much things change as we move forward in time. The January 31, 2011 prediction. According to ABC 15 coverage of the Phoenix housing conference, the 2009 recovery was predicted in 2012; in 2010, they predicted recovery in 2014; and then in 2011, they change it again to 2015.
Listen to all of these predictions that never came true.
Zillo.com said that housing prices were going to appreciate 6.5%, but it turned out to be well over 26%. On August 6, 2012 Case Shiller predicted that Phoenix area home prices would decline year over year in Phoenix but they didn’t change that to a decrease of 9.5% by the first quarter of 2013, followed by a no change, flap Priceline between the first quarter of 2013 in the first quarter of 2014. Not only did neither of those come true, in fact, Phoenix ended up being the number one city in Case Shiller’s own index in 2013. So not only did the first prediction not come true, but the second prediction of no change between 2013 and 2014, we’ve actually seen prices continue to increase with no stabilization of pricing occurring so far this year.
On May 8, 2012 Phoenix business Journal predicted that Phoenix home prices would fall 11% that year. None of these came true. The only one that came true was on May 3, 2012, when CNN money predicted that buying a home won’t get much cheaper. This is the only thing that was anywhere near correct. Super general and not helpful in the slightest.
Let’s look at some news quotes from years past regarding shadow inventory.
It was widely reported in 2011 that shadow inventory would take close to four years to clear. Just over a year later, MSN real estate, said, “Remember the Looming Shadow Inventory? Never mind.”
This next one is really hilarious: Forbes reported in April of this year that not only are we in a bubble, but also, we have shadow inventory. Never mind that these are two mutually exclusive things. You cannot have a bubble and shadow inventory at the same time. One drives prices down. The other is artificial appreciation. These are two completely different extremes.
Doubletalk, Bubble Talk.
All of these analysts are basically fighting amongst themselves:
CNBC – 30 April 2013, “Boost in Home Prices Doesn’t Equal Bubble”
CNBC – 1 May 2013, “Why the Fast Rise in Home Prices Doesn’t Equal a Bubble.”
Yahoo News – 29 May 2013, “Real Estate Euphoria: Is America in a New Housing Bubble?”
The Economist – 7 June 2013, “No US Housing Bubble.”
NuWire Investor – 12 June 2013, “Reports Show No Phoenix Housing Bubble.”
CNBC – 22 June 2013, “Housing Market: from Recovery to Bubble. Already?”
CNBC – 10 September 2013, “CNBC: We’re in Another Housing Bubble.”
Housingwire – 23 September 2013, “Experts: We Are Not in a Housing Bubble.”
The most credible source would be The Economist. NuWire is pretty good. CNBC is just trying to get eyes on their articles. It’s interesting to see how CNBC has changed their headlines between April and September. “We’re a bubble.” “We’re not in a bubble.” “Oh my God, where in a bubble.” “False alarm. No bubble.”
If we look at headlines from 2012 and 2013, regarding jobs and employment, you’ll find the same confusion confliction.
It just shows that we have a lot of confusing, conflicting headlines in the news media.
As a consumer who is not an expert in all of the different indicators, you don’t really know what to think regarding prices and appreciation. All of that can create insecurity in a buyer. Buyers don’t like uncertainty, so headlines like that can create a lot of skepticism. In truth, skepticism is a healthy thing. It keeps our prices from going too crazy.
The whole purpose of showing you these predictions is for you to see that people who do that much predicting this far in advance really don’t know what they’re talking about. The Crawford Report, however, gives what Tina Tamboer calls “headlights”:
If you feel like you’re driving at night in the real estate market, the Crawford Report just gives you some headlights to know if there’s a curve in the road up ahead. We don’t know what the weather is like in your destination. You can do some pretty good predictions on short-term level, but once you get past 3 to 6 months from now, you become a lot less accurate.”
Affordability & Interest Rates Headlines recap and what The Cromford Report headlights show in the realistic next 3 to 6 months.
If you want to buy or sell, and you want my headlight view for the next 3 – 6 months in your desired location, please give me a call at 602-456-9388 or email me at firstname.lastname@example.org.