Predictions - Virginia Beach Neighborhoods

Here’s a piece I wrote at the end of 2008.

Happy New Year! 2008 is over! Usually we cheer the oncoming New Year but this around time we are celebrating the passing of 2008. The stock market was down 35% and home prices were down… It depends who you ask. But everyone agrees that last year was not a good year for investors or home owners. Was it a good year for home buyers? Again, it depends who you ask.

That brings us to today’s $100,000 question. “Who do you ask?” Last year at this time the NAR (National Association of Realtors) was full of optimism. Clearly they were wrong. How about the Goldman Sachs analyst who predicted oil at $200 per barrel ?  Oops. Not so much.

If I have learned anything from 2008 I have learned that you can’t predict the future, and those who try, usually get it wrong. Still, that doesn’t keep people from trying. Here’s a great example.

Rob loves football. He has picked the winner of the last 6 Redskins games. Better yet, he has stood up on his barstool and made these predictions in front of a crowd of people. Here’s how he did it. The first week he went to 32 bars. At 16 he proclaimed the Redskins would win. At 16 he proclaimed they would lose. The Redskins won. The following week he went back to the 16 bars where he was correct and did the same thing. At 8 he proclaimed they would win and at 8 he proclaimed they would lose. The Redskins lost. The following week he went back to the 8… Until he was down to the one bar where he had been correct six times in a row. But this time the word was out and he was attracting a crowd on Friday night to see if he could do it again. One of his friends remarked, if you think he can pick football games, you should see him predict the stock market! Rob happened to be a stock broker and when his office opened on Monday there was a line of people around the block wanting to hear his stock picks.

Call me a cynic, but for every expert that says 2009 will be a rough year for real estate there is another one saying that home values will start to recover. Ultimately, it only matters what you think.

Edward Lorenz popularized the “Butterfly Effect” which describes how small changes can have large consequences. A butterfly flaps its wings in Shanghai which leads to a hurricane in North Carolina. Could this be true? If it is, there is a twist. If the butterfly flaps its wings in a slightly different way, there will be no hurricane!

So, we can’t predict the future. Let’s agree on that.

Here’s my prediction! People, just like you and I, will continue to buy and sell homes in Virginia Beach, Norfolk, and Chesapeake because everyone wants a place to call home. I can’t choose the future but I can choose how I think about it!