Category Archives: Real Estate

Zillow Q4 2015 Home Price Expectations Survey – Summary & Comments

On December 9, 2015, the Zillow Q4 2015 Home Price Expectations Survey (pdf) results were released.  This survey is done on a quarterly basis.

Excerpts from the Press Release:

The survey responses revealed that some housing experts are concerned about over-valuation in some of the nation’s hottest housing markets – and that there is significant disagreement among experts about whether the rapid home-value growth in those markets puts consumers at risk.

also:

Some experts said they think bubble conditions are already present in Miami, Los Angeles, Houston, San Diego, and Seattle. A quarter of respondents said they think there is significant risk of a housing bubble in the next three years in Boston. (The same number of panelists said there is no risk of a bubble in Boston in the next five years).

The bubble fears are coming to the surface even as home values overall are expected to gradually level off over the next several years. The ZHPE panel projects an annual growth rate of 3.9 percent through the end of 2015 – a gradual slowing of the U.S. housing market. Over the next five years, among all 108 panel respondents, the expected average annual home-value appreciation rate is now just over three percent. This scenario would result in a national median home value of more than $215,000 by the end of 2020.

Various Q4 2015 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow Home Price Expectations Survey

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, will continually climb.

The detail of the Q4 2015 Home Price Expectations Survey (pdf) is interesting.  Of the 100+ survey respondents, only one (of the displayed responses) forecasts a cumulative price decrease through 2020.  That forecast is from Mark Hanson, which foresees a 15.97% cumulative price decrease through 2020.

The Median Cumulative Home Price Appreciation for years 2015-2020 is seen as 3.78%, 7.28%, 10.63%, 13.78%, 17.19%, and 20.62%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Mark Hanson’s above-referenced forecast) will prove too optimistic in hindsight.  From a longer-term historical perspective, such a decline is very mild 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, 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 2052.23 as this post is written

House Prices Reference Chart

As a reference for long-term house price index trends, below is a chart, updated with the most current data (through September) from the CalculatedRisk blog post of November 24, 2015 titled “Real Prices and Price-to-Rent Ratio in September”:

(click on chart to enlarge image)

nominal house prices

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2089.14 as this post is written

House Prices Reference Chart

As a reference for long-term house price index trends, below is a chart, updated with the most current data (through June) from the CalculatedRisk blog post of August 25, 2015 titled “Real Prices and Price-to-Rent Ratio in June”:

(click on chart to enlarge image)

house prices

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1867.61 as this post is written

Zillow Q3 2015 Home Price Expectations Survey – Summary & Comments

On August 13, 2015, the Zillow Q3 2015 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

An excerpt from the Press Release:

Panelists predicted home values to end 2015 up 4.1 percent year-over-year, on average, down from the 4.3 percent year-end prediction made by the same panel last quarter. Home value appreciation is expected to slowly level off beginning next year (3.4 percent average annual expected appreciation) and through 2019 (3.1 percent average annual expected appreciation).

This trajectory would see the median U.S. home value rise above the April 2007, bubble-era peak of $196,400, on average, by December 2017. The most optimistic panelists predicted home values would surpass bubble-era peaks as soon as February 2017, while the most pessimistic said pre-bubble peaks would not be met or exceeded before the end of the decade (figure 1).

“The panel’s expectation for U.S. home values fell to a 3.4 percent average annual rate for the five-year forecast horizon. This is the first time in 18 months that this proxy for experts’ housing market sentiment has weakened, and it’s the lowest rate recorded in three years,” said Pulsenomics Founder Terry Loebs. “With slow wage growth persisting and monetary policy liftoff looming, home price expectations may continue to drift lower for some time.”

Various Q3 2015 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow Home Price Expectations Survey chart

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, will continually climb.

The detail of the Q3 2015 Home Price Expectations Survey (pdf) is interesting.  Of the 100+ survey respondents, only two (of the displayed responses) forecasts a cumulative price decrease through 2019; and only one forecasts a double-digit percentage cumulative price drop.  That forecast is from Mark Hanson, which foresees a 11.91% cumulative price decrease through 2019.

The Median Cumulative Home Price Appreciation for years 2015-2019 is seen as 4.00%, 7.74%, 11.39%, 14.75%, 17.90%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Mark Hanson’s above-referenced forecast) will prove too optimistic in hindsight.  From a longer-term historical perspective, such a decline is very mild 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, 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 2086.36 as this post is written

House Prices Reference Chart

As a reference for long-term house price index trends, below is a chart, updated with the most current data (through March) from the CalculatedRisk blog post of May 26, 2015 titled “Real Prices and Price-to-Rent Ratio in March”:

(click on chart to enlarge image)

Nominal House Prices

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2116.25 as this post is written

Zillow Q2 2015 Home Price Expectations Survey – Summary & Comments

On May 12, 2015, the Zillow Q2 2015 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

An excerpt from the Press Release:

Most of the 111 panelists who participated in this survey expect home values to level off in the next several years. The panel expected home values to rise 4.3 percent in 2015, to a median of $184,615. They expected that the average annual growth rate through 2019 would slow to 3.6 percent.

“The overall outlook for U.S. home values is largely unchanged compared to last quarter, and the expectations gap between the least optimistic and most optimistic experts continues to narrow,” said Pulsenomics founderTerry Loebs. “However, the most optimistic panelists still expect home values to grow at more than twice the average annual pace of the least optimistic panelists. The gap between the two groups is significant, and amounts to a 2 ½ year difference in when the two groups expect U.S. home values to eclipse their pre-recession peak.”

Various Q2 2015 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow 5-12-15 - Home Price Expectations

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, will continually climb.

The detail of the Q2 2015 Home Price Expectations Survey (pdf) is interesting.  Of the 111 survey respondents, only one (of the displayed responses) forecasts a cumulative price decrease through 2019; and even that one does not foresee a double-digit percentage cumulative price drop.  That forecast is from Mark Hanson, which foresees a 8.16% cumulative price decrease through 2019.

The Median Cumulative Home Price Appreciation for years 2015-2019 is seen as 4.30%, 8.37%, 12.04%, 15.58%, 19.12%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Mark Hanson’s above-referenced forecast) will prove too optimistic in hindsight.  From a longer-term historical perspective, such a decline is very mild 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, 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 2098.76 as this post is written

Zillow Q1 2015 Home Price Expectations Survey – Summary & Comments

On February 13, 2015, the Zillow Q1 2015 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

An excerpt from the Press Release:

The panelists predicted U.S. home values will rise 4.4 percent in 2015, to a median value of $187,040. The most optimistic forecasted a 5.5 percent increase, while the least optimistic projected a 3.1 percent increase. On average, panelists said they expect median U.S. home values to exceed their pre-recession peak of $196,400 by May 2017.

“During the past year, expectations for annual home value appreciation over the long run have remained flat, despite lower mortgage rates,” said Terry Loebs, Founder of Pulsenomics. “Regarding the near-term outlook, there is a clear consensus among the experts that the positive momentum in U.S. home prices will continue to slow this year.  At 4.4 percent, overall expectations for nationwide home value growth in 2015 are one-third lower than the actual 6.6 percent appreciation rate recorded last year.”

Various Q1 2015 Zillow Home Price Expectations Survey charts are available, including that seen below:

Q1 2015 Home Price Expectations Press Release - U.S. Home Price Expectations chart

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, will continually climb.

The detail of the Q1 2015 Home Price Expectations Survey (pdf) is interesting.  Of the 101 survey respondents, only one (of the displayed responses) forecasts a cumulative price decrease through 2019; and even that one does not foresee a double-digit percentage cumulative price drop.  That forecast is from Mark Hanson, which foresees a 7.55% cumulative price decrease through 2019.

The Median Cumulative Home Price Appreciation for years 2015-2019 is seen as 4.50%, 8.16%, 12.04%, 15.07%, 18.75%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Mark Hanson’s above-referenced forecast) will prove too optimistic in hindsight.  From a longer-term historical perspective, such a decline is very mild 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, 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 2096.99 as this post is written

House Prices Reference Chart

As a reference for long-term house price index trends, below is a chart, updated with the most current data (through October) from the CalculatedRisk blog post of December 30, 2014 titled “House Prices: Better Seasonal Adjustment; Real Prices and Price-to-Rent Ratio in October” :

(click on chart to enlarge image)

house price indices October 2014

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2083.46 as this post is written

Zillow Q4 2014 Home Price Expectations Survey – Summary & Comments

On November 11, 2014, the Zillow Q4 2014 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

Two excerpts from the Press Release:

  • More than 100 experts predict U.S. home values to end 2014 up an average of 4.8 percent from 2013, to a median home value of $176,760.
  • Almost 90 percent of respondents with an opinion expect the housing market to fully normalize within five years.
  • In the longer term, panelists are most concerned by would-be first-time buyers in a weak financial position and demographic changes affecting the housing market.

Home values will end 2014 up 4.8 percent year-over-year, and will gain another 23.5 percent in value, cumulatively, through 2019, according to results of the latest Zillow Home Price Expectations Survey.

also:

The panelists said they expect home values to appreciate between 3 and 4 percent annually over the next five years, on average, slowing to an annual rate of 3.2 percent in 2019. Nationally, the median home value is currently $176,500, according to the 2014 Q3 Zillow Real Estate Markets Report, and is projected to cross the $200,000 threshold in September 2018. Home values are expected to rise above their 2007 peak of $196,400 in February 2018.

Various Q4 2014 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow U.S. Home Price Expectations

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, will continually climb.

The detail of the Q4 2014 Home Price Expectations Survey (pdf) is interesting.  Of the 107 survey respondents, only one (of the displayed responses) forecasts a cumulative price decrease through 2019; and even that one does not foresee a double-digit percentage cumulative price drop.  That forecast is from Mark Hanson’s prediction, which foresees a 6.83% cumulative price decrease through 2019.

The Median Cumulative Home Price Appreciation for years 2014-2019 is seen as 5.00%, 8.99%, 12.48%, 15.86%, 19.33%, and 22.91%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of these forecasts (as seen in Mark Hanson’s above-referenced forecast) will prove too optimistic in hindsight.  From a longer-term historical perspective, such a decline is very mild 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 2036.10 as this post is written

House Prices Reference Chart

As a reference for long-term house price index trends, below is a chart, updated with the most current data (through July) from the CalculatedRisk blog post of September 30 titled “House Prices: Real Prices and Price-to-Rent Ratio decline in July” :

(click on chart to enlarge image)

house price indexes

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1946.56 as this post is written