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The Problem with Predictions

As a Real Estate Agent, author and trainer I am always being asked to make predictions about the market. One of my colleagues used to answer the question in a whimsical way.  He would reach into his pocket and take out a little marble and roll it onto the table and say, “Wait, I just happen to have my crystal ball here. Now I know it is very small, so let me see if I can look into it and make a few tiny predictions.”  It was a cute response and a great ice breaker but he made the point on the value of most predictions.

Don’t get me wrong on this, there is certainly a definite value to be asking what one should expect to happen in a potential transaction or even with respect to the immediate future vis a vis market trends. But this is much more like asking your doctor about the prognosis of your disease, or a condition you might be dealing with, when they are treating you as their patient. Having said this, sometimes even they have to do some guess work too. AND sometimes they simply get it wrong.  We have all heard of miraculous recoveries that defy explanation. But these are always the exception rather than the rule.
Here’s a partial list of predictions put together by Jayson Slade, a fellow blogger: they are unrelated to Real Estate but they really gave me a chuckle. They were gleaned from newspaper articles from 1923. Here’s what the experts said 100 years ago. 

  1.  People will work a max of four hours a day.  The headline for that one was, “No More Hard Work by 2023!”  They said electricity would make it possible.  (In 1923, less than half of U.S. homes had power.)
  2.  No ugly people.  They thought beauty pageants would become obsolete, because it would be almost impossible to choose a winner.
  3.  Women will paint their teeth black to be fashionable.  Instead, a lot of people whiten their teeth now.
  4. Gasoline will be replaced by radio waves.  So, powering your car by blasting radio waves somehow.  (???)
  5. The average life expectancy will be 100 years old . . . and another expert said 300.  The average in the U.S. back then was just 57 years old, and now it’s around 76.  The oldest living person is set to turn 119 next month.
  6.  Flying from Chicago to Germany will only take 18 hours.  They were too conservative with that one.  It’s really half that now, around a nine-hour flight
  7.  Cancer will be eradicated.  Not yet, but we’re making pretty good progress. And Joe Biden promised us this as part of his campaign platform.

Long range predictions have little value and frequently over time they appear to be downright goofy. So when it comes to making predictions in Real Estate, remember, the more generalized and the greater the time frame the less reliable they will be. Whenever I am asked to predict the future, my answer is always the same,”It depends.” At that point I ask the person a litany of questions to bring greater clarity to the scenario.
 What should I expect if I am buying today? “It depends.”

 Are you buying residential or commercial? If residential, where are you looking to buy? Do you require a specific school district,what price range, when are you expecting to close, will you be buying cash, or will you be financing, are you a first time buyer, do you have a house to sell first, how long do you expect to stay in the house, are you handy or do you require the property to be in move in condition. This is the dozen or so questions that just begin the process before even the remotest possibility of a prediction can occur. Rest assured, I will be following all of these questions up with more questions as we proceed to take you through the tempestuous waters of the Real Estate market in 2023. So here’s where I will make one bold faced prediction based on all of the data I have compiled.

In general, at least in the greater Buffalo NY market, this will be a good year to buy residential property, if you are willing to pay the price. We will discuss the specifics of what I just said in future posts.

Author Brendan J. Cunningham is a New York Licensed Associate Real Estate Broker, lead of the Platinum Team at HusVar Real Estate, as well as an accomplished writer, Shakespearean trained professional actor, and podcaster.

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