Where Are Home Prices Headed Over the Next 5 Years?
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.
Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey:
Home values will appreciate by 4.5% over the course of 2016, 3.6% in 2017 and about 3.2% in the next two years, and finally 2.9% in 2020 (as shown below). That means the average annual appreciation will be 3.5% over the next 5 years.
The prediction for cumulative appreciation increased over a full point from 17.5% to 18.7% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 11.1%.
Bottom Line
Individual opinions make headlines. We believe the survey is a fairer depiction of future values.
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Very cool idea for a survey. Take the average of all the experts and come up with a number.
Even at 11.1% for a five-year period, I think most home owners would be okay with this rate of increase.
Hi ~ I really appreciate your analytics, graphs and service. Question, though… I recall that I think it was just this past Fall when the monthly reports coming out of KCM were saying national experts agreed on an average of 5% a year over the next 5 years, so I’ve been quoting that. This is a much different picture. Which is accurate? Thank you.
Hi Rick,
Thank you for reaching out! The Home Price Expectation Survey is released on a quarterly basis and averages the predictions of 100 experts in the real estate market. Their predictions at this time last year were calling for a 3.4% price appreciation per year over the next 5 years, which isn’t too far off their current prediction. The 5% a year sounds closer to the predictions from CoreLogic where they call for a 5.3% appreciation year-over-year.
In such a fast paced real estate environment, even the experts are constantly adjusting their predictions. Our goal is to keep you as up-to-date with what the experts are saying as we can.
Nice report to have to share. Thanks KCM! I always like to say my crystal ball is foggy when asked where is the market headed.