EconomicGreenfield

On December 20 Zillow released its December 2011 Home Price Expectations Survey results.  This survey (formerly called the MacroMarkets Home Price Expectation Survey) is done on a quarterly basis.

The accompanying chart 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 (on a cumulative basis) through 2016.

The survey detail is interesting.  Of the 109 survey respondents, 9 (of the displayed responses) foresee a cumulative price decrease through 2016; and of those 9, only 3 foresee a double-digit percentage cumulative price drop.  Mark Hanson remains the most “bearish” of the survey participants with a forecast of a 25.17% cumulative price decline through 2016.

The Median Cumulative Home Price Appreciation for years 2011-2016 is seen as -2.00%, -1.99%, .29%, 3.01%, 6.96%, and 10.63% 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.  Although a 25.17% 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.”

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1265.33 as this post is written

Yesterday (September 21) MacroMarkets released its September 2011 Home Price Expectations Survey (pdf) results.  This survey is now done on a quarterly basis.

The accompanying chart is seen below:

(click on chart image to enlarge)

As one can see from the above chart, the average expectation is that not only has the residential real estate market (nearly) hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2015.

The survey detail is interesting.  Of the 111 survey respondents, 20 (of the displayed responses) foresee a cumulative price decrease through 2015; and of those 20, only four foresee a double-digit percentage cumulative price drop.  Mark Hanson remains the most “bearish” of the survey participants with a forecast of a 22.03% cumulative price decline through 2015.

The Median Cumulative Home Price Appreciation for years 2011-2015 is seen as -2.53%, -2.62%, -.84%, 1.99%, and 5.44% 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.  Although a 22.03% 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.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1134.24 as this post is written

On June 22 MacroMarkets released its June 2011 Home Price Expectations Survey (pdf) results.  This Survey is now done on a quarterly basis.

The accompanying chart is seen below:

(click on chart image to enlarge)

As one can see from the above chart, the average expectation is that not only has the residential real estate market (nearly) hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2015.

The survey detail (pdf) is interesting.  Of the 100+ survey respondents, 18 (of the displayed responses) foresee a cumulative price decrease through 2015; and of those 18, only three, Gary Shilling, John Brynjolfsson, and Anthony Sanders foresee a double-digit percentage cumulative price drop.  Gary Shilling remains the most “bearish” of the survey participants with a forecast of a 19.68% cumulative price decline through 2015.

The Median Cumulative Home Price Appreciation for years 2011-2015 is seen as -3.10%, -2.22%, -.15%, 2.94%, and 6.72% 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 19.68% 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.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1292.89 as this post is written

On March 22 MacroMarkets released its March Home Price Expectations Survey results.

Here is the Press Release (pdf); the accompanying chart is seen below:

(click on chart image to enlarge)

As one can see from the above chart, the average expectation is that not only has the residential real estate market (nearly) hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2015.

The survey detail (pdf) is interesting.  Of the 111 survey respondents, only 9 (of the displayed responses) foresee a cumulative price decrease through 2015; and of those 9, only two, Gary Shilling and Mark Hanson, foresee a double-digit percentage cumulative price drop.  Gary Shilling remains the most “bearish” of the survey participants with a forecast of a 19.68% cumulative price decline through 2015.

The Median Cumulative Home Price Appreciation for years 2011-2015 is seen as -.5%, .98%, 4.03%, 7.14%, and 11.15% respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of forecasts (seen in Gary Shilling’s above-referenced forecast)  will prove too optimistic in hindsight.  Although a 19.68% 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 at this time many people 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, 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.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1310.19 as this post is written

On December 22 MacroMarkets released its December Home Price Expectations Survey results.

Here is the Press Release (pdf); the accompanying chart is seen below:

(click on chart image to enlarge)

As one can see from the above chart, the expectation is that not only has the residential real estate market (nearly) hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2015.

The survey detail is interesting.  Of the 110 survey respondents, only 7 foresee a cumulative price decrease through 2015; and of those 7, only one, Gary Shilling, sees a double-digit percentage cumulative price drop.  He remains the most “bearish” of the survey participants with a forecast of a 19.68% cumulative price decline through 2015.

The Median Cumulative Home Price Appreciation for years 2010-2015 is seen as -1.0%, -.4%, 1.94%, 4.6% , 7.86%, and 11.69% respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of forecasts (seen in Gary Shilling’s above-referenced forecast)  will prove too optimistic in hindsight.  Although a 19.68% 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 at this time many people 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, 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.

A Special Note concerning our economic situation is found here

SPX at 1257.64 as this post is written

On September 21 MacroMarkets released its September Home Price Expectations Survey results.

Here is the Press Release (pdf); the accompanying chart is seen below:

As one can see from the above chart, the expectation is that not only has the residential real estate market hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2014.

The survey detail is interesting.  Gary Shilling remains the most “bearish” of the survey participants with a forecast of an 18.78% cumulative price decline through 2014.

The Median Cumulative Home Price Appreciation for years 2010-2014 is seen as -.17%, -.85%, 3.17%, 6.10% , and 9.7%, respectively.

For a variety of reasons, I continue to believe that even the most “bearish” of forecasts (seen in Gary Shilling’s above-referenced forecast)  will prove too optimistic in hindsight.  Although an 18% 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 at this time many people 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, there exists outsized potential for a price decline of severe magnitude, unfortunately.

A Special Note concerning our economic situation is found here

SPX at 1138.20 as this post is written

On Wednesday (June 23) MacroMarkets released its June Home Price Expectations Survey results.

Here is the Press Release (pdf); the accompanying chart is seen below:

As one can see from the above chart, the expectation is that not only has the residential real estate market hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2014.

The survey detail is interesting.  The most “bearish” of the forecasters is seen as Gary Shilling, with a forecast of 18.78% cumulative price decline through 2014.  A couple of other forecasters are close to this forecast, including John Brynjolfsson, with a forecast of a 18.08% cumulative price decline through 2014; and Mark Hanson with -17.37%.  Of note, all three of these most “bearish” forecasters see the preponderance of losses “front-loaded” (i.e. occurring over the nearest years, 2010-2012).

For a variety of reasons, I believe that even these “most bearish” of forecasts will prove too optimistic in hindsight.  Although an 18% decline is substantial, from a longer-term historical perspective such a decline is rather tame in light of the wild excesses that have occurred over the years.

I have written extensively about the residential real estate situation.  For a variety of reasons, it is exceedingly complex.  While many people have an optimistic view at this time regarding future residential real estate pricing trends, in my opinion such a view is unsupported on an “all things considered” basis.  Furthermore, there exists outsized potential for a price decline of severe magnitude, unfortunately.

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SPX at 1073.69 as this post is written