A famous quotation, probably erroneously dedicated to the financier J. P. Morgan, is that, when asked for an outlook on the stock market, he replied, “it will fluctuate”. The real estate market tends to fluctuate too, between two states: “no brainer” and “cautiously optimistic”. But now is the beginning of a new year and time for something more nuanced.
Fresh off the back of the festive season, it is now “outlook” season, just as it is at this time, every year. It is time to feast on global / regional / country / sector / segment real estate outlooks. The more comprehensive may cut the markets by investment style and cover the quadrants of real estate investing. Some will delve deeper into the outlook for specific cities. The trouble is, when you read or hear them there is, typically, very little outlook in them.
These documents or presentations are full of what has happened (mostly economic data subject to revision or, political happenings) but, there is little out there regarding the future of real estate markets. Rightly so: predicting the future is tricky, though some make a tricky business out of it as what William Sherdon describes as “The Fortune Sellers”. So why produce “outlooks” that are “future-lite” at all? In their book, Superforecasting, Philip Tetlock and Dan Gardner float the idea that one view of forecasting is that,
”…the goal of forecasting is not to see what’s coming. It is to advance the interests of the forecaster and the forecaster’s tribe.”