September 11, 2007 (LPAC)--Today the National Association of Realtors (NAR) issued a forecast, revising its previous estimate of the real estate market collapse further downward. They now expect home sales to collapse 8.6%, as opposed to their previous estimate of 6.8% collapse. What is important however, is not so much the numbers in the forecast, but the number of revisions that their forecast has undergone-- just this year. The press release indicates that this is the ninth time this year that the NAR has had to revise its forecast. Assuming monthly forecasts, that would mean that (each forecast) they have issued was essentially a revision.

Something is wrong with the method. Part of the reason is that the NAR is a sellers organization, and biases everything it says to minimize the depth of the crisis. But another reason, which also infects many in Congress, is that they are looking at this as if it were simply a real estate problem, which it emphatically is NOT. This is systemic in nature and breadth. Any effective solution must start by looking at the problem from that perspective, otherwise it will be flawed and ineffective.

A good recommendation would be to look at the method of Lyndon LaRouche, who has made nine forecasts in the last 40 years, all of which have come true, with no revisions necessary.