Forecasting | John Burns Real Estate Consulting

Our Forecasts


Calling It Right

We forecast the following key housing variables for over 100 markets, as well as 10 regions and the US overall:

  • Resale Home Value Appreciation
  • New Home Price Appreciation
  • Resale Home Sales
  • Single-Family Permits
  • Multifamily Permits
  • Employment Growth
  • Burns Affordability Index
  • Burns Housing Cycle Risk Index
  • Mortgage Rates
  • Apartment Asking Rents

To do this, we analyze the job growth, population growth, household formation, mortgage rate, and household income forecasts of others and come to our own conclusions.

We collect and analyze a lot of data and debate industry issues with our wide variety of clients to form our conclusions. Our unique process of gathering feedback form our consultants and clients gives us confidence that we make the most informed forecast possible.

 

Three Sources Contribute to the Forecasting Process, Each Weighted by Market:

John Burns Real Estate Consulting’s 
extensive housing market knowledge plays a significant role in our processes. Diversified client feedback makes us all smarter.


Consulting market experts
have years of experience in their assigned markets and provide unique insight on a timely basis.


Our research team 
spends countless hours scouring data on each market to collect the evidence informing our conclusions.

 
 

Forecasting Track Record

We have a proven track record of accurately calling the market, thanks to our research, collaboration with our clients, and culture of calling it like we see it.

2016

We hit a bullseye on total housing construction. We called for 1.16 million housing starts, exactly in line with Census full-year 2016 data. We forecasted 11% growth in single-family starts (off slightly from the actual 9% growth) and called for a 7% drop in multifamily starts (actual decline was 3%). In addition to construction, we also called it right with repair and remodeling (R&R) in 2016. Our original forecast called for 7.8% R&R growth, which turned out to be in line with several big name building product companies’ growth as well as professional remodelers. Perhaps more importantly for our building product and investor clients, we were early to the game on our call for big project R&R spending to outperform. Throughout 2016, big ticket sales drove topline growth for Home Depot, Lowe’s, and Fortune Brands.


2015

Our 2015 US housing forecasts that were set back in January came in very accurate. Two of the hardest variables to predict are mortgage rates and job growth. At the beginning of the year we predicted mortgage rates would average 4.0% in 2015, almost spot on with the actual average of 3.9%. We hit a bullseye with our beginning of the year job growth forecast of 2.1%.


2014

 At our February company meeting, 11 teams made their predictions for our coveted Forecaster of the Year award. The Bay Area team won, projecting 9.0% price appreciation and 3,200 single-family permits for the year, in comparison to the actual 9.1% appreciation and 3,072 single-family permits. Our Riverside-San Bernardino team finished a very close second.


2013

 At the start of the year, we claimed “The Housing Market Is ‘On Fire’ Thanks to Low Mortgage Rates; 2013 Should Be a Banner Year!” with a very bullish forecast, including 8.0% new home price appreciation. The market delivered 8.2% new home price appreciation.


2012

In February 2012, we forecasted 919K starts in 2013, much higher than consensus. Actual housing starts in 2013 totaled 925k.


2011

We forecasted a 3% price decline, rising rents, and a bottom in construction. We also cautioned on the impact of student loan debt delaying homeownership before it was covered in the media.


2010

Our starts forecast was 20% more accurate than a WSJ survey of economists. Our forecasted price appreciation was within 2% of the actual. We pitched the idea of mass rental of SF homes as a potential solution directly to government, and they pursued the idea, eventually positioning us as the experts when institutional investors got involved.


2009

We said “great land will be bid up aggressively,” and land prices soared in early 2010 through 2013.


2008

We said future growth would be dominated by renters, and the apartment REIT stocks soared by 84% and renter household formation surged for 6+ years.


2007

We said resale prices would fall another 15%, and they fell 19% in 2008 and 2009.We warned of the tightness of mortgage credit in a newsletter.


2006

We called that Southern California was a time bomb ready to explode, and then construction fell 84% in 2008 and 2009.


We regularly update our forecasts at the market level as new information comes to light and roll our market-level forecasts up to regional and national forecasts.