A big hat tip to HousingPanic for sharing the following from Lawrence Yun, chief economist for the National Association of Realtors. From Yun’s remarks we learn two things- first that Yun follows the blogosphere and is apparently a HousingPanic reader. [Do you suppose he stops by Doom while he’s at it?] The other is that Yun obviously has methodology issues:
[HP has taken it to Greenspan a time or two– but has also found "plenty of blame to go around." What do you know, Keith and Yun agree on something!]
Back in 2001, in the aftermath of the internet stock bubble collapse and the September 11 terrorist attacks, Alan Greenspan — then the Fed chairman — made deep cuts in interest rates in order to stave off a possible economic recession. Many also blame Mr. Greenspan for having fueled the housing market bubble and subsequent collapse by keeping the rates too low for too long.
Though some in the blogosphere have figured Alan Greenspan as one of the key persons to blame for the current housing mess, I do not blame Mr. Greenspan. I believe there is plenty of blame to go around due to other factors.
It is also fine for people to point the finger at me. In a fast changing market conditions, I too have been off on my forecast. I knew that the boom was clearly unsustainable and I made the forecast in early 2007 that home prices were likely to experience a price decline on a national level for the first time since the Great Depression. The national median home price indeed fell by 1.4%.
I believe I downgraded my forecast for ten or so straight months in 2007 as it was strongly pointed out to me. At the same time, the Blue Chip consensus forecast, comprised of about top 50 private forecasters, including forecasts by Merrill Lynch, Goldman Sachs, UCLA, and the like — had also downgraded the housing forecast by more than 20 straight months. Forecasting is never perfect. Forecasts are bound to be off but the forecaster’s job is to make the best prognosis given the available information at the time. The readers should always view any forecast with caveat emptor.
My offhand recommendation would be that if your forecasts were excessively optimistic that many months in a row, it’s time to reconsider your forecasting methods. Yun however, rather than changing methodology, apparently revises his forecasts when it is "strongly pointed out" that they are wrong.
Yun did say "The readers should always view any forecast with caveat emptor."
It appears that Yun and I can find something that we agree on as well.