Welcome!




Expand Your Education with These Courses from
Becoming a Successful Sales Professional: Skills for Sales Success: Part One.
The Psychology of Consultative Selling: Skills for Sales Success: Part Four.
A Consumer Advocate Approach to Real Estate & Mortgages: Courses 1 & 2.
Accredited Buyer's Representative.
Bundle 3: CIPS Institute (US Version).

Most Economists Agree Home Prices Will Bottom by 2013

Have a comment on this article? Share on Facebook!

Economists continued to predict home prices will decline only slightly in 2012, falling 0.4 percent for the entire year, and will increase thereafter, according to the June 2012 Zillow® Home Price Expectations Survey, compiled from 114 responses by a diverse group of economists, real estate experts and investment and market strategists.

For the first time, the individual economists surveyed were largely in agreement on the trajectory of home prices nationally, signaling that a true bottom may be imminent.

The survey, sponsored by leading real estate information marketplace Zillow, Inc. (NASDAQ: Z) and conducted by Pulsenomics LLC, is based on the projected path of the S&P/Case-Shiller® U.S. National Home Price Index during the coming five years.

However, a majority (56 percent) of respondents also believe that, in five years, the U.S. homeownership rate will be below 65.4 percent, the rate recorded in the first quarter of 2012. One in five believe the homeownership rate will be at or below 63 percent, testing or breaking the 62.9 percent rate established in 1965, the lowest on record.

“It’s good to start to see some convergence of expectations among economists, as it lends further support to the claim that a bottom is real,” said Zillow Chief Economist Stan Humphries. “However, the fact that more than half of respondents believe that the homeownership rate will fall lower should be a sobering reminder that significant challenges remain ahead for the housing market, from negative equity to millions of foreclosed homeowners who now have impaired credit, making a return to homeownership harder than it would be otherwise.”

Looking further into the future, respondents’ expectations remained relatively consistent with their March 2012 outlook.

The most optimistic[i] quartile of panelists predict a 1 percent increase in 2012, on average, while the most pessimistic[ii] predict an average decline of 2 percent. The June survey results also indicate that most of the panelists expect home prices to increase for the remainder of this year after falling 2 percent in the first quarter.

While the stronger signals of an imminent market bottom and turn are encouraging, the expected pace of housing recovery over the coming three years is significantly weaker now than it was two years ago.

“In June 2010, the average cumulative appreciation in U.S. home prices expected by our panel was 10.3 percent for the years 2012 through 2014. Now, two years later, the average prediction among our experts for the same period is just 3.5 percent,” said Terry Loebs, founder of Pulsenomics. “This translates into $1.25 trillion less housing wealth than expected nationally over the coming three years.”

Additional details regarding this portion of the survey are available at www.pulsenomics.com.

This is the 14th edition of the Home Price Expectations Survey, and it was conducted from May 31-June 14, 2012, by Pulsenomics LLC on behalf of Zillow, Inc.

For full survey results and graphics, visit www.zillow.com/blog/research, or www.pulsenomics.com.

Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.




Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>