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The Experts Look at Home Prices in 2010

Trying to determine where home prices will be at the end of the year is no easy task. MacroMarkets surveyed 92 economists and other housing analysts as to where they see home values as measured by the S&P/Case-Shiller national index. MacroMarkets, LLC is a company co-founded by Professor Robert Shiller who also founded the well respected price index used in the survey.

Here are some of the more interesting results of that survey (available to WSJ subscribers here):

Of the 92 experts only 77 allowed their predictions to be made public. Another three didn’t voice an opinion on prices for the remainder of 2010. The results:

We can see that 7 out of 10 believe that prices will either remain the same or decrease. The pool of housing experts surveyed consisted of economists from large firms (ex. FedEx, John Hancock) and many universities.

If we cull out the experts associated with firms that actually are immersed in the valuation of properties (banks, mortgage insurance companies, housing associations and rating firms), the numbers are even more dramatic. Of the twelve firms we deem as in the business of housing valuation on a day-to-day basis, only one (Deutsche Bank) believes prices will increase. Ten (83.3%) believe prices will decrease, and one believes prices will remain the same. The ten experts who see prices falling are represented by the following groups:

IHS Global Insights

Moody’s Economy.com

PMI Group

National Association of Realtors

National Association of Home Builders

Fannie Mae

Freddie Mac

Bank of America

Wells Fargo

Barclay’s Capital

What does this mean to you?

If you are thinking of selling your home, realize that waiting might not make sense. Over 80% of the experts most closely aligned with the housing industry believe your house will continue to lose value as the year goes on.

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2 replies
  1. Linda Kerner
    Linda Kerner says:

    While this is not good news, it is reality. It is in line with what I have said over the last couple of years. Looks like the prediction is Nov. 2013 when prices will again reach TODAYS prices. The market will not recover as fast as it has been dropping. We are seeing another very soft buyer pool since the 8K first time buyer incentives expired.

  2. Doug Holmes
    Doug Holmes says:

    It is really very basic economics. It’s always about supply and demand. Almost every market in the US has over 12 months of inventory. The gold standard for a balanced, healthy real estate market is 6 months of inventory. When supply and demand are out of balance, price is the only thing that can fix it. A change in price fixed the imbalance in 2005. We had much more demand than supply and price shot up. It shot up so fast that supply quickly surpassed demand. Now we will have to see another 15-20% fall in prices to correct the current imbalance between supply and demand. This will happen slower than when prices went up and will hopefully return us to a healthy balanced market of 6 months of inventory by 2014.


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