House Prices Through 2015
Everyone seems to have an opinion on where home prices are headed. Housing bulls are saying prices may start rebounding as early as later this year. Some housing bears are saying that prices may still drop another 10-15%. What actually is going to happen? No one knows for sure.
However, Macro Markets, a financial technology company, actually surveyed 108 economists, real estate experts, and investment and market strategists for their June 2011 Home Price Expectations Survey. They then averaged all 108 opinions. Here is what the report says about house prices over the next five years:
- 2011: prices will depreciate 3.52%
- 2012: prices will appreciate .46%
- 2013: prices will appreciate 2.18%
- 2014: prices will appreciate 2.92%
- 2015: prices will appreciate 3.47%
Accumulative appreciation (including this year’s projected depreciation) will stand at 5.71% in 2015.
Bottom Line
The experts say home prices will begin to see appreciation next year and return to historic levels of annual appreciation by 2015.
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Le’t hope they’re right!
Its a pleasant prediction, but until unemployment and UNDER employment rates fall, and uncertainty about western sovereign debt is sorted out, I see only slowly falling prices. Not to mention tightening requirements for mortgage qualitication and a new view of many potential home owners that renting is less risky and just plain simplier.
Of course with inflation factored in their projected numbers might work as to sales prices, but not accual value.
I agree with Bruce concerning unemployment affecting prices. We have not yet begun to see the foreclosures and short sales that will hit the market; according to PBS, 25% of all mortgages could be short sales, and that is a staggering number. Houses do sell quickly when priced lower, and appraisers use these numbers for mortgages, thus they are creeping downward. European banking has everyone wondering, so I sure don’t think I can offer any opinion on the future, simply observations.
The market will continue to drop as reo properties come up for sale. What is
a great deal now you will find in 6 months that you overpaid. For investors in
apartments I recommend the section 8 rental programs. Be aggressive in offering low prices for properties as there is plenty of inventory. Remember the savings and loan problems in Texas in the 80’s and properties were sold dirt cheap. This will happen again but across the nation. Don’t let realtors tell you
what to offer. Offer what you want. Here is my reason. It’s difficult to get loans so many properties are being sold for cash . Cash is King!! Its’s your cash you determine the offer. If banks don’t like it so what, better deals will come up. Don’t be afraid to offer the banks 50% of asking. This is how I operate and it works.
Is this the same bunch of all-star economists who have been incorrectly forecasting a “recovery next year” for the past 5 years?
Just checking…
looks like no matter what we might be looking at 2015+ to re-coop the 2005-6 prices..
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