I wish I could ignore HousingPredictor.com, but they're back again. Housing Predictor is run by a Florida Realtor, has a bad prediction record, and has no professional credibility among serious economists (as I wrote about previously).

Unfortunately, their unsupported claims keep getting quoted in the news. Ever more interesting, the director of the Montana Department of Revenue, Dan Bucks, used HousingPredictor to bolster his case for continued appreciation in Montana. Audio file here (Jan. 23 Reappraisal Committe):

I'm going to present one projection of what happens, one prediction of what is-- may happen next. And I'm just gonna say, I can't endorse it; But it is the only prediction out there that is applicable to Montana and it is specific to specific, uh, cities in Montana ...

There is an organization called HousingPredictor.com that came-- went into business a few years ago, that operates on the internet. They claim that they have an 85% accuracy record in terms of predicting local housing markets ...

I wanted to provide this information to you because I think it provides an interesting perspective. Their prediction is that 5 of the top 25 housing markets in 2009 all across the country will be in Montana, with Billings ranking as the 3rd strongest market they're predicting in 2009.

If you'd like some predictions specific to Montana, Director Bucks, you might try looking for people who live in, oh, say, Montana instead of Florida. They might know the market a little bit better. And despite that claimed 85% accuracy, HousingPredictor got 2008 all wrong.

After some relatively cheery unemployment and foreclosure stats, Bucks went on:

So those are reasons for optimism. And I wanted to present that to you because I think that it's important not to assume that everything is falling apart. I think, in fact there's more reasons to be optimistic than pessimistic, that we are better positioned for Montanans to take advantage of lowering mortgage rates which are now heading down to the 4% ranges, and that will have a beneficial affect ...

Deferred sales volume being down can be viewed as either a precursor for future difficulties or it can be viewed instead as the building up of pent-up demand once mortgage rates fall and a potential for the revival of the market.

Pent-up demand! It's right out of the Realtor playbook. We've got thousands of buyers just waiting on the sidelines. They're waiting because, well, we're not really sure why. And they'll start buying when rates come down, because the 4.8% you get now is just too darn high.

So some people are listening to Housing Predictor. But let's look at their 1st quarter revisions. The headlines say the Billings has jumped to #1 nationwide for predicted 2009 appreciation. That is true, but the bigger truth is that all Montana cities have been downgraded in the last few months. Here's a table illustrating that:

Way to go, HousingPredictor. A few more quarters like this and you'll have all those figures revised to the negative side, where they should be.

And for your entertainment, here's a little bit of explanation from their site (emphasis mine):

Consumer confidence in Montana may be hurting a little because of the national recession, but the state has never been through a major real estate correction. It's missing the national housing depression.

Billings has seen home sales slow, but prices have been rocketing upward in Montana terms, appreciating 6% in 2008 as demand for housing grows. The inventory of homes on the market is healthy, but not excessive. Billings is forecast to appreciate 2.1% in average home prices in 2009.

Got that? Montana has never seen a housing downturn. And demand for housing is growing at the same time that sales are slowing. With their great grasp of history and economics, how can you not trust HousingPredictor.com?