EconomicGreenfield

On May 7, the Zillow Q2 2013 Home Price Expectations Survey (pdf) results were released.  This survey is done on a quarterly basis.

An excerpt from the Press Release:

The survey of 105 economists, real estate experts and investment and market strategists was sponsored by leading real estate information marketplace Zillow, Inc. (NASDAQ: Z) and is conducted quarterly by Pulsenomics LLC. Panelists said they expected median U.S. home values to rise to $165,280, on average, by the end of 2013. At the end of 2012, the U.S. Zillow Home Value Index stood at $156,800.

Various charts from the March 2013 Survey results are presented, including the following:

As one can see from the above chart, the average expectation is that the residential real estate market, as depicted by the U.S. Zillow Home Value Index Level, will continually climb.

The detail of the Q2 2013 Home Price Expectations Survey (pdf) is interesting.  Of the 105 survey respondents, only 3 (of the displayed responses) forecast a cumulative price decrease through 2017; and of those 3, none foresee a double-digit percentage cumulative price drop.  The most “bearish” of these forecasts is that of Gary Shilling’s prediction of a -5.05% cumulative price decrease through 2017.

The Median Cumulative Home Price Appreciation for years 2013-2017 is seen as 5.26%, 10.25%, 14.04%, 17.95% and 22.20%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Gary Shilling’s above-referenced forecast)  will prove too optimistic in hindsight.  From a longer-term historical perspective, such a decline is rather tame in light of the wild excesses that occurred over the “bubble” years.

I have written extensively about the residential real estate situation.  For a variety of reasons, it is exceedingly complex.  While many people continue to have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis.  Furthermore, (even) from these price levels there exists outsized potential for a price decline of severe magnitude, unfortunately.  I discussed this downside, based upon historical price activity, in the October 24, 2010 post titled “What’s Ahead For The Housing Market – A Look At The Charts.”

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1632.69 as this post is written

On March 18, the Zillow March 2013 Home Price Expectations Survey (pdf) results were released.  This survey is done on a quarterly basis.  (please note:  as stated in the Press Release, “This is the first survey edition that utilized the U.S. Zillow Home Value Index (ZHVI) as the reference benchmark for the panel’s home price expectations.”)

Various charts from the March 2013 Survey results are presented, including the following:

As one can see from the above chart, the average expectation is that the residential real estate market, as depicted by the U.S. Zillow Home Value Index Level, will continually climb.

The detail of the March 2013 Home Price Expectations Survey (pdf) is interesting.  Of the 118 survey respondents, 3 (of the displayed responses) forecast a cumulative price decrease through 2017; and of those 3, only 1, John Brynjolfsson, foresees a double-digit percentage cumulative price drop, at 11.04%.

The Median Cumulative Home Price Appreciation for years 2013-2017 is seen as 4.78%, 8.68%, 12.62%, 17.03% and 20.77%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in John Brynjolfsson’s above-referenced forecast)  will prove too optimistic in hindsight.  Although a 11.04% cumulative decline is substantial, from a longer-term historical perspective such a decline is rather tame in light of the wild excesses that occurred over the “bubble” years.

I have written extensively about the residential real estate situation.  For a variety of reasons, it is exceedingly complex.  While many people continue to have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis.  Furthermore, (even) from these price levels there exists outsized potential for a price decline of severe magnitude, unfortunately.  I discussed this downside, based upon historical price activity, in the October 24, 2010 post titled “What’s Ahead For The Housing Market – A Look At The Charts.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1549.71 as this post is written

On December 26, the Zillow December 2012 Home Price Expectations Survey (pdf) results were released.  This survey is done on a quarterly basis.

An image from the December 2012 Survey results is seen below:

(click on chart image to enlarge)

As one can see from the above chart, the average expectation is that the residential real estate market, as depicted by the Case-Shiller US National Home Price Index (NSA), will continually climb after 2012.

The detail of the December 2012 Home Price Expectations Survey (pdf) is interesting.  Of the 105 survey respondents, 4 (of the displayed responses) forecast a cumulative price decrease through 2017; and of those 4, only 2, William Hummer and Gary Shilling, foresee a double-digit percentage cumulative price drop, at 13.13% and 11.87%, respectively.

The Median Cumulative Home Price Appreciation for years 2012-2017 is seen as 4.60%, 8.12%, 11.94%, 15.86%, 19.42%, and 23.67%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in William Hummer’s above-referenced forecast)  will prove too optimistic in hindsight.  Although a 13.13% cumulative decline is substantial, from a longer-term historical perspective such a decline is rather tame in light of the wild excesses that occurred over the “bubble” years.

I have written extensively about the residential real estate situation.  For a variety of reasons, it is exceedingly complex.  While many people continue to have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis.  Furthermore, (even) from these price levels there exists outsized potential for a price decline of severe magnitude, unfortunately.  I discussed this downside, based upon historical price activity, in the October 24, 2010 post titled “What’s Ahead For The Housing Market – A Look At The Charts.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1419.83 as this post is written

On September 20, the Zillow September 2012 Home Price Expectations Survey (pdf) results were released.  This survey is done on a quarterly basis.

An image from the brief on the September 2012 Survey, displaying survey responses by quartile,  is seen below:

(click on chart image to enlarge)

Other charts are also seen in the brief.

As one can see from the above chart, the average expectation is that the residential real estate market, as depicted by the Case-Shiller US National Home Price Index (NSA), will continually climb after 2012.

The detail of the September 2012 Home Price Expectations Survey (pdf) is interesting.  Of the 113 survey respondents, 5 (of the displayed responses) forecast a cumulative price decrease through 2016; and of those 5, only 1 (Gary Shilling) foresees a double-digit percentage cumulative price drop, at 15.21%.

The Median Cumulative Home Price Appreciation for years 2012-2016 is seen as 2.0%, 4.86%, 8.21%, 11.57%, and 15.86%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Gary Shilling’s above-referenced forecast)  will prove too optimistic in hindsight.  Although a 15.21% cumulative decline is substantial, from a longer-term historical perspective such a decline is rather tame in light of the wild excesses that occurred over the “bubble” years.

I have written extensively about the residential real estate situation.  For a variety of reasons, it is exceedingly complex.  While many people continue to have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis.  Furthermore, (even) from these price levels there exists outsized potential for a price decline of severe magnitude, unfortunately.  I discussed this downside, based upon historical price activity, in the October 24, 2010 post titled “What’s Ahead For The Housing Market – A Look At The Charts.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1460.15 as this post is written

On June 24, the Zillow June 2012 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

An accompanying image is seen below: (click on chart image to enlarge)

As one can see from the above chart, the average expectation is that the residential real estate market, as depicted by the Case-Shiller US National Home Price Index (NSA), will slowly climb after 2012.

The detail of the June 2012 Home Price Expectations Survey (pdf) is interesting.  Of the 114 survey respondents, 8 (of the displayed responses) forecast a cumulative price decrease through 2016; and of those 8, only 1 (Gary Shilling) foresees a double-digit percentage cumulative price drop, at 16.98%.

The Median Cumulative Home Price Appreciation for years 2012-2016 is seen as -.50%, .87%, 3.52%, 6.61%, and 10.34%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Gary Shilling’s above-referenced forecast)  will prove too optimistic in hindsight.  Although a 16.98% decline is substantial, from a longer-term historical perspective such a decline is rather tame in light of the wild excesses that occurred over the “bubble” years.

I have written extensively about the residential real estate situation.  For a variety of reasons, it is exceedingly complex.  While many people continue to have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis.  Furthermore, (even) from these price levels there exists outsized potential for a price decline of severe magnitude, unfortunately.  I discussed this downside, based upon historical price activity, in the October 24, 2010 post titled “What’s Ahead For The Housing Market – A Look At The Charts.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1313.72 as this post is written