This next example is going to tick off the 600 pound gorillas in my space: FiServ Lending Solutions, along with CNN-Money.com and Fortune magazine.
FiServ handles all the big banks and Wall Street firms – I’m a little peon compared to them.
But what the hell, you deserve to know the truth… so here goes…
CNN teamed up with FiServ to publish a detailed local market analysis. They used the same, outdated techniques everyone else uses to predict real estate cycles – the same methods that I keep saying will never give you accurate or timely, actionable advice.
At the end of 2007, they predicted what home prices would do in 2008 and 2009 for a bunch of local markets.
They did a similar prediction more recently – but that’s the thing about real estate predictions – you’ve got to wait several years to prove them wrong. Unless you’ve got some weird passion or genetic wiring for this stuff, most people forget all about it… and the publishers continue putting out uncontested garbage.
Check out this example. This comes from their December 8, 2007 website. The comments in the two boxes are mine – they show what actually happened.
So at the end of 2007, they predicted Yuma Arizona would appreciate fractionally in 2008, and go up 5.8% in 2009.
In reality, home prices in YUMA DECLINED horribly in both years – Their predictions missed by 10.5% in 2008 and by 17.2% in 2009.
Folks, these are home prices we’re talking about, it’s not like trying to predict a roulette wheel that has a wild variance. How can you predict a housing market to increase 6% and have it decline 11% – and still call yourself an expert?
..and then keep making the same mistake over and over for all these other markets?
In Yuba City, California, they called for a 5% decline the next year when it was actually 28%!!!
Yakima, Washington – they called for it to drop in 2008, but it went up. They called for it to go up in 2009, but it went down. I’m not making this stuff up!
Let me flip through some more real quick… Focus on the SIZE of their error for each one… the red text shows what they missed it by.
Want to see the SHOCKING PROOF? I’ll Show You in my latest Real Estate Market Report