Compiled from a diverse group of economists, real estate experts and investment and market strategists, the survey is based on the projected path of the S&P/Case-Shiller US National Home Price Index during the coming five years.
The March survey shows that economists expect US home prices to begin to rise in 2013, although expectations for how much they would rise were tempered when compared to their responses in the December survey. For example, economists now predict home prices will rise 1.4% in 2013, compared to their previous prediction of 1.8%.
‘The fourth quarter drop in the national Case-Shiller Index was sharper than some expected and is the likely reason so many of the economists in the survey revised their forecasts downward,’ said Zillow chief economist Stan Humphries.
‘Looking at the longer history of these forecasts by top economists, the bottom in home prices always seems just around the corner but never quite here. Conditions across the country vary considerably. Some markets have already hit bottom and are experiencing tight inventory and multiple offers, while foreclosures and negative equity continue to pull down the housing market in many other parts of the country,’ he explained.
The economists surveyed varied widely in their expectations for 2012. The most optimistic quartile of panellists predict a 1% increase, on average, in home prices during the full year, while the most pessimistic predict an average decline of 2.8%.
Of the individual economists, the most bullish, Susan Sterne of Economic Analysis Associates predicts home prices will climb 5% during the year while Gary Shilling of A. Gary Shilling & Company, expects prices to fall 8%.
The March survey also queried the panellists about their views regarding recent housing policy statements by the Federal Reserve as well as the potential market impact of a large scale, bulk sales programme of foreclosed properties by the federal government.
‘The majority of experts believe that implementation of a bulk sales program is a good idea, even though more than half indicated that it is at least somewhat likely that bulk sales will materially depress overall price levels in housing markets,’ said Terry Loebs of Pulsenomics.
‘However, 79% believe that a government bulk sales programme will result in a shorter waiting period before the onset of a broad and sustained housing market recovery,’ he added.
