We all have traditions for the end of the year. For some, it is writing a list of resolutions. For others, it is signing up for yet another gym membership. For the financial industry, the New Year’s tradition is to make predictions for the new year. In the last few weeks of December, my inbox gets flooded with people wanting to get their predictions quoted online. As easy as it is to put all of these bombastic prognostications into a prediction piece, we don’t generally publish these kinds of articles (except, of course, for our annual Metatrends series coming soon). Instead, we thought it might be fun to look back at some of the predictions for 2023, particularly the ones that didn’t come true.

The first bad take goes to all of the people who predicted a recession. There are plenty of people I could call out with this prediction, but the one I will put on blast is the International Monetary Fund’s (IMF) chief, Kristalina Georgieva. She predicted that over a third of the world’s economies would be in recession by the end of 2023, which, of course, is way off. There are certainly still countries like China and parts of the EU that are experiencing a recession, but most countries were able to grow their economy even with the high-interest rates that we saw rise throughout the year.

One of the reasons that many economists thought that a recession was imminent was the possibility that high-interest rates would cause more unemployment. Beth Ann Bovino, the US chief economist at S&P Global, expected to see the unemployment rate peak at 5.6 percent by the end of the year. Fortunately for all of us, that did not turn out to be the case. Unemployment that high would have slowed the economy down to a halt (even if it might have pushed the Fed to lower interest rates by now). It turns out that companies didn’t lay workers off as expected. Although many people still have jobs, wage growth seems to have stalled.

It wasn’t just the macro-economists that missed on their predictions; real estate experts were wrong about a lot of their estimates as well. The National Association of Realtors expected the best real estate markets to be places like Atlanta, Georgia, Knoxville, Tennessee, and Jacksonville, Florida. In fact, none of these were even close to the top home markets last year. Instead, cities that were already considered “overpriced” like Los Angeles, San Diego, and Boston, were some of the biggest winners for property values. While the economists thought that remote workers would move away from expensive cities to places where their dollar goes further, they did not anticipate the return to the office and the high interest rates’ cooling effect on relocations.

The last bad prediction came from the entire real estate industry, or at least the 450 CFOs lucky enough to be part of Deloitte’s yearly industry survey. Of them, 40 percent thought that their revenue would increase. That wishful thinking (or hubris?) obviously did not go as planned. It wasn’t just the self-awareness that was lacking. The most attractive risk-adjusted opportunities identified by the group in the survey; downtown offices and suburban offices.

Predictions are easy, and they have their place (LinkedIn), but in the end, they are only as helpful as the questions that they raise. In 2024, we are dedicated to continuing to raise difficult questions for you, our readers. As always, we are interested in what kind of questions you have for the new year. Share your feedback and tips at [email protected] or connect with us on X through @propmodo. Not subscribed yet? Sign up for our newsletter here.

⛔️ Risk-adjusted: Property reinsurance rates have risen by as much as 50 percent this year, a cost that will eventually be pushed to property insurance policies across the country.

🤝 Non-traded: More bad press has come out about large non-traded REITs like Blackstone, as their slowing contributions are causing some to suggest that they should start marking down their valuations.