Economists aren't very good at predicting the future, and I'm only slightly better it seems. I was trolling through the blog looking at how the homes in some older posts had done when they sold, when I ran across this post. The post talks about a report by Esmael Adibi, director of Chapman's Anderson Center for Economic Research on the overall economy. You know, jobs, housing etc.
His predictions were woefully wrong. He predicted real estate would drop 21% in 2008 and bottom out at $258k in late 09. He did not see much happening in unemployment as he expected added healthcare jobs to offset losses in construction. Man was he wrong.....
Then I made my predictions. Mine were better, but even Mr. Pessimistic was to optimistic. I predicted we would drop closer to 30% in 2008 and another 10 to 15% on 2009 and that the median would bottom around $175K in late 09. I predicted unemployment would increase to levels higher than that of the early 90s.
How far off were we? Prices dropped north of 40%. So I missed by about 10% but the expert missed by 20%. For the median we will have to wait and see. But we are both obviously off. He is WAY off. The median for the entire IE is currently sitting at $158k I believe. It's still dropping and how much farther is anyone's guess. I don't think it will go much lower but then again I didn't think it would go this low.
On employment, the expert wasn't even in the ball park. How he could forecast no additional job losses in mid 2008 is beyond me. I think the village idiot could see them coming in mid 2008. I was much closer here, predicting losses higher than the early 90's. Unemployment peaked at around 12% back then. I think we are close to 13% currently.
Funny stuff to look back and see what we though last year.....