Tag Archives: real estate bubble

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

Zillow Q3 2014 Home Price Expectations Survey – Summary & Comments

On August 1, 2014, the Zillow Q3 2014 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

Two excerpts from the Press Release:

The panel also said they expect U.S. median home values to end 2014 up 4.6 percent, on average, and to exceed their 2007 peak levels by the end of 2017, roughly a decade after the housing bust and ensuing recession began. The survey of 104 economists, real estate experts and investment and market strategists asked panelists to predict the path of the U.S. Zillow Home Value Index through 2018, and solicited opinions on the age of homeowners, the homeownership rate and the impact of rising mortgage interest rates on home sales volume. The survey was sponsored by leading real estate information marketplace Zillow, Inc. and is conducted quarterly by Pulsenomics LLC.

also:

Panelists predicted the U.S. Zillow Home Value Indexiv would rise 4.6 percent year-over-year by the end of 2014, to $177,895, and expected the pace to slow in each of the next four years. The most optimistic groupv of panelists predicted a 5.6 percent annual increase in home values this year, on average, while the most pessimisticvi predicted an average increase of 3.7 percent.

Various Q3 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 Q3 2014 Home Price Expectations Survey (pdf) is interesting.  Of the 104 survey respondents, only one (of the displayed responses) forecasts a cumulative price decrease through 2018; 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 4.35% cumulative price decrease through 2018.

The Median Cumulative Home Price Appreciation for years 2014-2018 is seen as 4.70%, 8.99%, 12.48%, 15.85%, and 19.33%, 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 1925.15 as this post is written

Zillow Q2 2014 Home Price Expectations Survey – Summary & Comments

On May 16, 2014, the Zillow Q2 2014 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

Two excerpts from the Press Release:

The survey of 106 economists, real estate experts and investment and market strategists asked panelists to predict the path of the U.S. Zillow Home Value Indexi through 2018 and solicited opinions on the main cause of declining home affordability. The survey was sponsored by leading real estate information marketplace Zillow, Inc. and is conducted quarterly by Pulsenomics LLC.

also:

On average, panelists said they expect nationwide home value appreciation of 4.4 percent through the end of this year, to a Zillow Home Value Index of$176,380. Panelists said they expect home value appreciation to slow to 3.8 percent by the end of 2015, on average, and to 3.4 percent through 2016. During the pre-bubble years from 1987 to 1999, home values grew at 3.6 percent per year.

The most optimistic groupii of panelists predicted a 5.8 percent annual increase in home values this year, on average, while the most pessimisticiiipredicted an average increase of 3.2 percent. On average, panelists said they expected U.S. median home values to exceed their pre-recession peaks by Q1 2018. The most optimistic panelists predicted home values would rise roughly 12.6 percent above their 2007 peaks by the end of 2018, on average, while the most pessimistic said they expected home values to remain about 5.9 percent below 2007 peaks.

Various Q2 2014 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 Q2 2014 Home Price Expectations Survey (pdf) is interesting.  Of the 106 survey respondents, only one (of the displayed responses) forecasts a cumulative price decrease through 2018; 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 5.11% cumulative price decrease through 2018.

The Median Cumulative Home Price Appreciation for years 2014-2018 is seen as 4.50%, 8.54%, 12.37%, 15.85%, and 19.33%, 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 1877.86 as this post is written

Zillow Q1 2014 Home Price Expectations Survey – Summary & Comments

On February 12, 2014, the Zillow Q1 2014 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

Two excerpts from the Press Release:

The survey of 110 economists, real estate experts and investment and market strategists asked panelists to predict the path of the U.S. Zillow Home Value Indexi through 2018 and solicited opinions on investor activity and federal monetary policy. The survey was sponsored by leading real estate information marketplace Zillow, Inc. and is conducted quarterly by Pulsenomics LLC.

also:

On average, panelists said they expect nationwide home value appreciation of 4.5 percent through the end of this year, a pace that exceeds historically normal annual appreciation rates of around 3 percent. This appreciation is expected to slow to roughly 3.8 percent in 2015 and 3.3 percent by 2018, rates much more in line with historic norms.

Based on current expectations for home value appreciation during the next five years, panelists predicted that overall U.S. home values could exceed their April 2007 peak by the first quarter of 2018, and may cross the$200,000 threshold by the third quarter of 2018.

Various Q1 2014 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow 2-12-14 HPE Survey Chart Q1 2014 - large

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 Q1 2014 Home Price Expectations Survey (pdf) is interesting.  Of the 110 survey respondents, only two (of the displayed responses) forecast a cumulative price decrease through 2018; and of those two, neither foresee a double-digit percentage cumulative price drop.  The most “bearish” of these forecasts is that of Mark Hanson’s prediction of a 5.91% cumulative price decrease through 2018.

The Median Cumulative Home Price Appreciation for years 2014-2018 is seen as 4.50%, 8.51%, 12.48%, 15.86%, and 19.76%, 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 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 1819.26 as this post is written

Zillow Q4 2013 Home Price Expectations Survey – Summary & Comments

On November 7, the Zillow Q4 2013 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

An excerpt from the Press Release:

The survey of 108 economists, real estate experts and investment and market strategists was sponsored by leading real estate information marketplace Zillow, Inc. and is conducted quarterly by Pulsenomics LLC.

While appreciation is expected to remain strong through the remainder of this year, the pace of home value growth is predicted to slow considerably through 2018. Panelists said they expect appreciation rates to slow to roughly 4.3 percent next year, on average, eventually falling to 3.4 percent by 2018.

Based on current expectations for home value appreciation over the next five years, panelists predicted that overall U.S. home values could exceed their May 2007 peak by the first quarter of 2018, and may cross the $200,000 threshold by the end of 2018.

Various Q4 2013 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow 11-7-13 U.S. 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 Level, will continually climb.

The detail of the Q4 2013 Home Price Expectations Survey (pdf) is interesting.  Of the 108 survey respondents, only two (of the displayed responses) forecast a cumulative price decrease through 2018; and of those two, neither foresee a double-digit percentage cumulative price drop.  The most “bearish” of these forecasts is that of Mark Hanson’s prediction of a 5.77% cumulative price decrease through 2018.

The Median Cumulative Home Price Appreciation for years 2013-2018 is seen as 6.00%, 11.07%, 14.99%, 18.84%, 23.25%, and 27.29%, 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 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 1752.31 as this post is written

Zillow Q3 2013 Home Price Expectations Survey – Summary & Comments

On August 8, the Zillow Q3 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 106 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 $167,490 by the end of this year, up from $156,900 at the end of 2012 and $161,100 currently. Based on current expectations for home value appreciation over the next five years, the panelists on average predicted that U.S. home values could approach new record highs by the end of 2017, coming very close to the previous peak level of $194,600 set in May 2007.

Various charts from the Q3 2013 Survey results are presented, including the following:

(click on image to enlarge chart)

Zillow 8-8-13 - Q32013_ZHPES_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 Level, will continually climb.

The detail of the Q3 2013 Home Price Expectations Survey (pdf) is interesting.  Of the 106 survey respondents, only four (of the displayed responses) forecast a cumulative price decrease through 2017; and of those four, none foresee a double-digit percentage cumulative price drop.  The most “bearish” of these forecasts is that of Mark Hanson’s prediction of a 3.05% cumulative price decrease through 2017.

The Median Cumulative Home Price Appreciation for years 2013-2017 is seen as 6.00%, 11.30%, 15.02%, 19.14% 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 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 1691.42 as this post is written

Zillow Q2 2013 Home Price Expectations Survey – Summary & Comments

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:

ZHPES Q2 2013 chart 5-7-13

 

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.”

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1632.69 as this post is written

Zillow March 2013 Home Price Expectations Survey – Summary & Comments

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:

Zillow March 2013 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 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

Zillow December 2012 Home Price Expectations Survey – Summary & Comments

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)

Zillow Dec2012 HPE Projections Chart

 

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

Zillow September 2012 Home Price Expectations Survey – Summary & Comments

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