Have you heard the prophets lately? The market is flooded with real estate predictions, and there are a ton of people telling us what the future will look like. So naturally I figured we should have a way to test whether these voices are legit or not. Enter the flow chart below.
Okay, I created this because it tickles my funny bone. But there’s some truth in here too maybe, right? Obviously we’re all thinking about the direction of the market, and that’s exactly what we should be doing. But let’s also carefully consider the credibility of messengers out there too.
A few serious points:
1) Predictions: One of the dangers of predictions is you can end up losing credibility when/if your “prophecies” don’t come true. For years I’ve watched people prophecy the demise of the market and then move their predictions ahead when they didn’t happen.
2) Local data: Watch local data closely and study the market to know the signs of a seasonal slowing vs a tanking market.
3) Living in the tension: I stray away from big market predictions because my crystal ball is broken and I’m humble about my ability to predict the future. This doesn’t mean I’m naive to red flags or unwilling to discuss issues that could affect the future market. No. It only means I’m realistic about studying trends for hours each month and then living in the tension of not knowing the future.
By the way, download a larger version of the image above here.
I hope that was helpful.
Class I’m teaching: On September 17th I’m teaching my favorite class called “How to think like an appraiser“. I’d love to see you there.
Questions: What do you think of the chart? Anything else I should’ve added?
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