No offense to weathermen, but I would absolutely love to be able to be wrong all the time and still be able to keep a job and everyone pay attention to me and plan their lives around what I say. Must be great! Especially in the south…”Yep, it’s going to be hot today-90s and maybe a few triple digit recordings in areas. With a 30% chance of rain today, isolated thunderstorms may be in your forecast and they may be severe.” Every. Day.

Having come from the finance world, I have seen how large of a role forecasting plays in everyday financial planning on the large scale. The everyday forecast becomes actual and, unfortunately, the forecast doesn’t always come to fruition. In real estate, many trends are very easy to spot. For example, large tract (100+ acres) sales in Kershaw County for the year 2015 dropped from 2 sales per month during the second quarter (6 sales total Q2) to 0 sales total in Q3. Why may you ask? Back to the weatherman…”It’s gonna be hot”. When its 100 degrees outside you don’t want to be on 100+ acres-it’s just plain rough. These larger tracts recovered with one each in each of the final 3 months of the year. When you step back for a few minutes and look at it, this makes sense. Q1 is slow with 2 sales-large spenders are still waiting for tax season and why ruin your annual budget at the beginning? Q2 explodes-people are outside because it’s pretty and enjoyable! Tax returns are back! Risk takers at this point have a much better feel for how the year may go with all of the books closed from the previous year and all budgets and planning set for the remainder of the year. Q3-it’s hot…temperature-wise only, unfortunately. Q4 those that waited to see how the year unfolded may now have a little bit of extra jingle in their pockets and may try to better their financial position by acquiring a new asset or taking an equity position.

By simply looking at the simple trends over a year, a real estate agent may have another point to bring up to a potential client as well as truly show their knowledge of the market. Unfortunately, we can’t be wrong all the time. Or at least it doesn’t pay to be wrong.
Learn more in this, “What Is Trend Forecasting?” article.