Cracked Glass Found in Home Prices Crystal Ball
Who doesn’t want to know what will happen in the future? That’s a very small group, for sure, since good planning is a cornerstone of good management — for households as well as for organizations of every kind.
So, whenever Coastal Delaware homeowners see headlines like “Home Prices Up ‘Unsustainable’ 5.9% in 2012,” above a MarketWatch article that explains that price growth is expected to slow, they probably would like to gauge the reliability of the forecasters.
In this case, MarketWatch is part of the relatively stalwart Wall Street Journal, so credibility goes up. But closer examination finds that the author is just reporting information real estate site Zillow compiled. Zillow is indeed an internet behemoth — but can local homeowners rely on its national predictions to gauge Rehoboth Beach home prices?
My own take is to find out how well has this source done in the past…
Looking back a very short while ago (to December 26 of last year), I find that Zillow’s survey of 100 economists and forecasters “said they expect home prices to increase in full-year 2012 by 4.6%.”
Hey! Hold it! This is only February, but now the same outfit is telling us that the actual home prices gain last year was 5.9%. Doing a little arithmetic, it seems that the 100 economists and forecasters, faced with the task of estimating home prices for a year that had just a week left, were off by 28%! (They also acknowledge that the same panel had predicted the rise would be 2.3% only three months earlier).
So I guess it’s not that surprising that they feel home price rises like last year’s are going to be ‘unsustainable’ in 2013. Apparently the actual home prices were unsustainable last year, too!
Since real estate and home prices in Rehoboth Beach are inherently local, it takes on-the-ground expertise to keep up with them. If you’d like to know where your home falls in today’s market, contact Mann & Sons now to schedule an initial consultation. I think we’re getting ready for an interesting spring season — and we’d love to help you explore your options!