2009 predictions

Predictions For 2009? Keep 'Em To Yourself, and I will, too!

The New Year is not yet one week old but that's not stopping market "experts" from predicting what's in store for 2009.

The calls on housing and mortgage rates run the gamut:

Home prices have farther to fall
Home prices have touched bottom
Mortgage rates will dip
Mortgage rates will rise
Put it all together and it's clear that the experts have no better idea about the future than you or I. Their guesses are educated ones, but they're guesses nonetheless.

A terrific example of how poorly experts can predict the future comes from a Wall Street Journal performance analysis of 1,700 mutual funds.

In 2008, only one earned a positive return. That one fund represents zero-point-zero-six percent of all tracked mutual funds. Surely, the fund managers of the other 99.94% didn't expect to post negative returns on the year.

So, before you use predictions about the demise (or recovery) of the broader economy to make "personal economy" decisions, consider that the oft-quoted experts have a hugely better track record in analyzing the past than the future.

All we know for sure right now is that home prices are, in general, lower than at the time point last year, and mortgage rates are, too. By 2010, both could be lower still.

Or they may not.

Bottom line: if you need a new place to live, this is a great time to buy. If you sacrice your quality of living while hoping for lower prices or rates, you may only end up with lower quality of life!