[Initial Perspective] Where Did All Those 'Real Estate Experts' Go?

"True Experts Do Not Urge Rash Investments"
Real Estate Declines Lead to Leaving Abroad and Cutting Off Contact

[Image source=Yonhap News]

During the years when housing prices soared, the real estate market was flooded with self-proclaimed experts. Using various analytical methods through online real estate communities and social networking services (SNS), they provocatively introduced specific areas and gained fame. They enjoyed popularity comparable to top instructors at Daechi-dong academies. They charged millions of won for a single lecture and even recruited dozens of students like an academy, embarking on expedition investments.

Until early this year, they insisted that housing prices had no choice but to rise, citing a shortage of housing supply. However, as the downward trend in housing prices began in earnest, they changed their tune. They argued that due to external factors such as the Russia-Ukraine war, global inflation, and the U.S. Federal Reserve's interest rate hikes, variables have emerged in the real estate market, making adjustments inevitable for the time being. This is a valid point. The domestic real estate market is indeed suffering from external shocks.

However, inflation and interest rate hikes had been anticipated since the second half of last year. A true expert should have checked these external variables in advance to analyze and forecast the market. Genuine experts do not encourage rash investments because there is a high risk of disturbing the market with incorrect information. Instead, they analyze uncertain environments and issue warnings about risks. Professor Nouriel Roubini of New York University, known as "Dr. Doom," predicted the 2008 global financial crisis, and American economist Nassim Nicholas Taleb likened the illusion of Wall Street caught in black-and-white logic to a "Black Swan," forecasting its downfall.

However, those who claim to be real estate experts in Korea are busy predicting rising housing prices and pinpointing areas that will increase more. Even now, some experts argue that although there is a downward trend for the time being, housing prices must rise next year due to a shortage of housing supply. Some experts have already put forward bottoming theories, claiming that a rising market will unfold again.

Some experts who have begun to disappear have also started to emerge. One expert, who was often contacted during reporting, recently said, "I will not enter Korea for the time being. It is not profitable during a real estate downturn, so I will spend a year abroad with my family." Another expert, who gained fame through online real estate communities and frequently appeared in the media, sharply stated, "I have now given up on real estate. Do not ask me anymore."

What will happen to the real estate market that even self-proclaimed experts are leaving? The real estate market we are witnessing now is experiencing a simultaneous surge in existing housing inventory and the disappearance of speculative excess demand. Interest rates have soared, and the perception of falling housing prices has begun to spread in the market, so a downward trend is likely to continue for the time being. But that is as far as it goes. No domestic real estate expert can pinpoint the timing of a price increase or the areas that will rise under the current circumstances. It is a time to understand the flow of the economy well and manage assets appropriately according to the situation.

Reporter Chawan Yong yongcha@