Why do homebuilders consume so much optimistic bullshit?

Homebuilders believe the feel-good nonsense printed in trade journals and industry media outlets and often rely on this information to make bad decisions.

https://missafricausa.org/hdjnk6hbj3 financial-media“Freedom is the right to tell people what they do not want to hear.”

https://integraleuropeanconference.com/2022/11/17/6nz1ire1n George Orwell

As someone who worked in the homebuilding industry for over 20 years, I often drank housing kool-aid with my co-workers. Although I remained grounded enough to see the obvious housing bubble of the 00s, many of my co-workers refused to acknowledge it, sometimes with heated arguments.

The homebuilding industry, like many others, has it’s own trade journals and industry news aggregators that keep people informed on happenings that impact the everyone who makes a living from home construction. But rather than seeing their mission as one of providing accurate and actionable information, most of these industry news sources see their job to provide emotional therapy and good news to keep everyone’s spirits up. Why is that?

https://pastiebap.com/site-news/xb38ffeb I suppose in any cyclical industry prone to brutally difficult downturns, the desire for good news and optimism is understandable; however, what astounds me is that the decision-makers who direct the flow of hundreds of millions of investment dollars consume this same bullshit, and worse yet, they rely on it to guide their decision making.humpty-dumpty_bailout

Buy Diazepam Bulk The current CEO of a major development company in Irvine convinced Wall Street investors to spend $650 million to buy the Great Park at the peak of the housing bubble. He gave speeches about how Orange County house prices would continue to rise at a rapid rate forever due to strong fundamentals. Where do you think he was getting this information?

https://militaryanalizer.com/139zwztej After the housing bust exposed every fundamental assumption behind Orange County house prices were a delusional fabrication of wishful thinking promulgated through a compliant media, it would be logical to assume the decision makers at major homebuilders and developers would be ousted for their catastrophic lack of good judgment, but that’s not what happened. Most were left in charge, many were promoted, and some were bailed out.

Buy Soma Online In Usa The media outlets that provided the bad information that stoked the magical thinking of the housing bubble actually increased their delusional “happy talk” during the bust to keep people’s spirits up. Emotional support is fine, but people who need that should seek out professional help, not supporting bullshit in the local news.baghdad_bob

The poster child for Bubble-Era bullshit was David Lereah, formerly of the NAr, but the economists for the homebuilders were only slightly less wrong, and most of them are still busy putting out their erroneous forecasts designed to foster good feelings among the faithful.

Economists Predict Robust Housing Starts in 2015

NAHB chief economist forecasts 26% growth and 800K single-family starts

https://kevinreillycollection.com/c1s6tr8 By Tim Regan, January 20, 2015

https://www.angelinvestmentnetwork.net/bbln3br8ap Three economists today shared their predictions regarding 2015 housing starts at the “Housing and Economic Outlook” seminar during this year’s International Builders’ Show (IBS) in Las Vegas.

https://missafricausa.org/61vt2ha4x The panel of economists was composed of David Crowe, the chief economist for the National Association of Home Builders (NAHB), David Berson, senior vice president and chief economist at Nationwide Insurance, and Frank Nothaft, chief economist and vice president at Freddie Mac.

Buy Diazepam Msj A who’s who of often-wrong forecasters.blinded_economists

https://victoriamapperley.co.uk/g3ctkop “Single family housing starts will increase 26 percent to 800,000 a year,” said Crowe. “That is still well below a normal level of about 1.3 or 1.4m starts,” he added. “While it’s a good year, it still leaves us a good distance away from where we need to be.” …

Nothaft also predicted a modest rise in home prices. “We’re expecting house prices to continue to rise in 2015 at 3.5-4 percent rise in values in 2015,” he said.

https://www.greenlifestylemarket.com/2022/11/17/26ljs0f9si … said Berson. “Homeownership desire is much higher for those who are in their 30s than those in their 20s.” As the economy gains steam in 2015, Berson predicts it will be a “significant factor” in encouraging millennial household formation.

https://integraleuropeanconference.com/2022/11/17/6n0laifazb I wonder how many homebuilders will overextend themselves in 2015 based on these predictions?

https://victoriamapperley.co.uk/zsh23wkq Remember Bold California housing market predictions for 2015?

Most economists who bother to make predictions offer vague predictions that allow them to claim clairvoyance even when they completely blow it. Further, some of these economists rewrite history to claim they predicted something they didn’t with hopes that nobody calls them on it.

https://markmadsen.com/2022/11/17/uy5oha9 Most economists make weak, timid and obvious predictions based on a repeat of past performance. If you look at the long stretch of time, sales volumes increase, and house prices go up about 3% to 4% per year. Predicting increasing sales and 3% to 4% appreciation really isn’t predicting anything, other than perhaps a belief that what’s happened on average in the past will happen again this year. Of course, that’s what most economists are predicting for 2015.

It’s time to market forecasters to admit the errors of their ways

https://pastiebap.com/site-news/u7ahbm5p By Barry Ritholtz, January 16cheerleading

https://www.bobbimccormick.com/8333w99q I come not to praise forecasters but to bury them.

https://care4needycopts.org/x1nldld5vq After lo these many years of listening to their nonsense, it is time for the investing community — and indeed, the seers themselves — to admit the error of their ways. Most forecasters are barely cognizant of what happened in the past. And based on what they say and write, it is apparent (at least to this informed observer) that they often do not understand what is occurring here and now.

Generic Xanax Online Cheap So there’s no reason to imagine that they have the slightest clue about the future.

Economists, market strategists and analysts alike suffer from an affinity for making big, frequently bold — and most often, wrong — pronouncements about what is to come. This has a pernicious impact on investors who allow this guesswork to infiltrate their thinking, never for the better.

https://www.greenlifestylemarket.com/2022/11/17/zgmlke9 Over the last few years, several people have offered astute observations criticizing ardent housing market bears like Keith Jurow or Mark Hanson for making bold predictions that haven’t come to pass. The common thread is that people are upset because they made a financial decision based on the arguments made by the forecasters, and rather than take responsibility for their own decisions, they want to lay blame on the forecaster.

https://www.angelinvestmentnetwork.net/1h99wx6d Right or wrong, most forecasters believe in their own forecasts, and many put their own money where their mouth is and accept the consequences. But no matter how self-assured the forecaster may be, they could be wrong, and people shouldn’t put blind faith in any forecaster and make the forecaster responsible for personal financial decisions, particularly when those forecasts are offered for nothing on the Internet.

https://missafricausa.org/pkb4erf44xl credibility_continuum

The Mainstream strategy is simple: Take the average annual change in whatever the subject at hand is and extrapolate forward a year. Voila! You have a mainstream forecast. … If you are feeling puckish, you can shade the numbers slightly up or down to separate your prediction ever so slightly from the rest of the pack — just to keep it interesting. …

https://thebirthhour.com/65llw8v9q9n The tight range of most market forecasts — forecasts that often prove wildly inaccurate — demonstrates the truth of what Barry is saying.delusional1

https://militaryanalizer.com/8nnxo3e Human beings, in general, stink at predicting the future. All of you. History shows us that people are terrible about guessing what is going to happen — next week, next month, and especially next year.Why is that? In my last column, I noted that people are error machines, a mess of biases and emotions. They seek out, read and remember only that which agrees with their thinking.

… expert forecasts are statistically indistinguishable from random guesses.

We are all guilty of confirmation bias. Once we come to believe certain general principals, we all seek confirming evidence from our environment and ignore contrary information.

Does anyone remember Janet/truthi from the OC Register blog? (She had many other aliases). She used to spam the real estate blog with 100 comments a day trying to convince everyone there was no housing bubble. She is the case study in using denial to support a crumbling world view.

It is important for investors to understand what they do and don’t know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

Never forget this simple truism: Forecasting is marketing, plain and simple.

As Yogi Berra said, “It’s tough to make predictions, especially about the future.”


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