Hedging Housing Bets

Seems to have been a little confusion at the U-T this morning.

First off, this report came out.

The Union-Tribune had this on its website:

“Housing prices start rebound,” it reads. That would seem to mean that the paper has news that housing prices have started to go up. I was intrigued, but there was no such news.

This was at 7 a.m. and it stayed, from what I could tell, for a couple of hours.

Then it changed to this:

“Worst over for housing prices?”

So at first the paper was sure that housing prices were rebounding; now it is just wondering.

It’s understandable that they may not know exactly how to plug it. Here’s part of what they reported in the actual story:

The Anderson forecasters, who took the lead in predicting a housing slowdown nearly four years ago, project that prices will decline by less than 2 percent through next summer, then start to rebound.

But they add that there’s a major wild card: the question of whether a wave of foreclosures might drag down local home prices and exacerbate the current economic slowdown.

This is funny. This is like saying that the Chargers will win the Super Bowl this year unless they lose too many games. Or better yet, it’s like predicting that public support for the war in Iraq will hold at its current levels as long as the insurgency doesn’t get worse.

So what does the actual Anderson Forecast say:

[T]he absence of any serious economic weakness in the next two years suggests that a protracted bear market for housing is unlikely. Thus, our forecast for the San Diego housing market is less building, weak sales volumes, and flat to falling home prices through 2007, with some improvements starting in mid-2008.

Not quite sure where the U-T got “Housing prices start rebound” from that.

The Anderson Forecast has made a name for itself by, with confidence, predicting the future of the housing market. It hasn’t always been perfect but confident.

But now the Anderson team is hedging. Smart, I suppose, but not much of a prediction.

I’m going to give it a try and make my own prediction a la Anderson.

Thinking, thinking, thinking … OK, here goes: I predict that traffic on I-15 this evening will be normal — unless, of course, there’s an accident because of potential rain.

Thing is, if I proclaimed to forecast what traffic will be like this evening, I better have a good idea whether it will rain or not. If I didn’t, I wouldn’t say anything.

Any Joe Schmoe can say that the 15 will be congested tonight if it rains and there’s an accident. It’s the expert’s job to tell us whether it will rain and whether there’s a good chance for an accident.

Neither one is something you can predict concretely, but you better come close if you’re going to call yourself a forecaster.

— SCOTT LEWIS