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, 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, changing their forecasts and they are still being reported to the public as newsworthy stories. It seems like a straight press release rather than a news story, doesn’t it?

One of the things that has always bothered me about NAR forecasts 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, poor consumer psyche, etc. Its simply sound bite driven. I have written about this before, 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. 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.


7 Comments

  1. John K August 10, 2007 at 9:46 am

    I agree. Whenever I see a NAR press release, I end up rolling my eyes.

    I pretty much ignore any and all information I receive from NAR (and, here in Massachusetts, MAR).

    There are much better sources of information on the state of the real estate market.

    I hope NAR understands they are becoming increasingly irrelevant.

  2. Athol Kay August 10, 2007 at 10:48 am

    Great post Jonathan and very true.

    Personally I was a little spooked by the fact that the new NAR Economist after Lereah (whose name eludes me) started releasing reports… and it sounded like just like Lereah. I mean exact same tone of writing.

    It just feels like a plastic market report issued from the Department of Spins Chief Sock Puppet.

  3. Jim Duncan August 10, 2007 at 2:43 pm

    The NAR is providing an opportunity for blogs to become much more credible sources of information and data. There is nothing wrong with honesty.

  4. anon8mizer August 10, 2007 at 4:51 pm

    Every time I read the NAR report,my reaction is the same as when I hear George Bush speak. My jaw drops and the electricity in my brain creates this silent utterance: Un-f——- believable!

  5. Lauren August 12, 2007 at 6:16 pm

    This is a little off topic, but I read an interesting blog several days ago on the future of the residential real estate. here is the link

  6. Sean August 13, 2007 at 9:32 am

    Totally agree JM. But would be interested to hear your thoughts about similar obfuscation by REBNY, a group that seems even less transparent than the NAR.

  7. […] See what Jonathan Miller has to sat about NAR reports here […]

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