Standing in front of a green screen a weatherman or weatherwoman predicts daily, weekly and even monthly weather conditions based on scientific facts, historical recordings and educated guesses. But even with upper-atmospheric pressure readers, satellite imagery and a plethora of data, predicting the weather is a difficult task and weathermen are notoriously wrong in their predictions. This historically inaccurate reporting doesn’t stop people from tuning in everyday and getting information and at time misinformation about the weather for the day. This essentially is the same thing that economists do, providing the lofty service of predicting future events to an information craving society.
As real estate enthusiasts, we often rely on economists to tell us where the real estate market is going and weathermen to tell us if we can show, see or even drive by a property that day. While these are separate instances, economists and weathermen have strikingly similar virtues and the responsibility of keeping the public informed for their own safety. As anyone can tell you, predicting future events is a tricky task and by no means an exact science, but when it comes to predictions at times weathermen and economists can be overly confident and jeopardize the safety of the public. It’s important to comprehend not only the evidence behind a prediction but also the source of the prediction.
Economists from the NAR have released reports on the real estate market and predictions both short-term and long term that have turned out to be almost completely inaccurate. Conversely economists from popular news sources like CNN have made predictions for sharp declines in the real estate market both short-term and long-term that turned out to be inaccurate as well. I find economists and weathermen to have similar success rates when it comes to predicting future events, one should not put too much confidence in reporting from either of these sources. Therefore, even if a weatherman tells you it’s going to be dry all week long be sure to keep an umbrella in your car…just to be safe.
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