It’s a race I guess.
Every time a quarter end gets close, all the economists start falling all over each other to be first out with their forecast for the next quarter. Having studied Econ myself in college, the one thing I’d really like to see is a scoreboard that shows how accurate these past forecasts are.
But that’ll never happen.
Because as soon as people saw how consistently worthless the forecasts are, and how they have literally zero correlation with reality, then the whole field of Econ would implode just like the American banking system is about to. And good riddance I would say.
So past accuracy notwithstanding (and apparently irrelevant), we have yet another forecast out.
This one was done by Marcus and Millichap, and they included their forecasts for 39 different metro areas in the US.
Ok – I decided to bite. I’m active in the apartment business here in metro Detroit. I own a couple of buildings, manage one myself, and I’m looking for more units to buy. I’m certainly no total “market expert” because this market is huge. But I am pretty knowledgeable. So I downloaded the “Detroit Metro Area Market Update”.
It only took one glance to see that they have no clue about this area.
Their headline read: “GENTRIFICATION EFFORTS WILL BOOST RENTER DEMAND”
And they went on to write: “The revitalization of downtown will lure major companies to the urban core, sparking long-term demand for rental units in the area, while lucrative concessions will bode well for the suburbs.”
My first thought was to check the date on the article to find out when it was written.
I don’t know about you, but I’ve been hearing about how downtown Detroit is ready to explode in population and popularity (and NOT Molotov cocktails) since I worked (but didn’t live) down there in 1986. And then again when Dennis Archer was elected mayor in 1994. And then again when Kweazy Kilpatrick was elected in 2002.
And now we’re hearing it all over again with Bing.
But just because Blue Cross and Quicken Loans have moved some people down there semi-recently doesn’t mean they’re going to live down there too.
Did Compuware cause a huge surge in rental demand when they moved downtown? Uh, no.
Do you remember back when that little company called General Motors moved their entire HQ (and then some) into the Ren Cen back in the 90’s? Did that cause a housing and rental surge?
Yes actually that one did. In Grosse Pointe.
Which makes my point that these forecasts aren’t worth horsesh*t.
This one in particular reads like it was written by someone who used google searches as their primary source. Especially some of their employment forecast numbers.
You can get your own copy of this forecast for any of the 39 Metro Areas by visiting this link. Registration is required. https://secure.marcusmillichap.com/SignIn.aspx?ReturnUrl=http%3a%2f%2fwww.marcusmillichap.com%2fservices%2fresearch%2freports%2fdefault.aspx%3ftab%3d1
Read it at your own risk. Or if you’d like a chuckle.
I’d be interested to hear your thoughts on this.