Tag Archives: Real Estate

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 30, 2016 titled “Real Prices and Price-to-Rent Ratio in June”:

(click on chart to enlarge image)

nominal price indexes

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2175.51 as this post is written

Zillow Q3 2016 Home Price Expectations Survey – Summary & Comments

On August 10, 2016, the Zillow Q3 2016 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

An excerpt from the Press Release:

Overall, the experts surveyed predict home price appreciation across the country will be up over 4 percent year-over-year by the end of 2016. They expect home prices to slow down over the next four years and by the end of 2020, they predict home prices will grow at an annual pace of just 2.9 percent.

“Panel-wide, the experts currently expect U.S. home values to finish 2016 with a healthy 4.5 percent year-over-year gain,” said Pulsenomics founder Terry Loebs. “This projection implies a somewhat cooler, but still solid, second half of the year. Although further price moderation is expected next year, nearly 90 percent of the panel is projecting lower home value gains in 2017. The longer-run outlook for housing market performance remains steady. Overall, the expected five-year average annual growth rate for home values actually rose, albeit slightly, for the first time in three years.”

Various Q3 2016 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow Q3 2016 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 Q3 2016 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, who foresees a 15.58% cumulative price decrease through 2020.

The Median Cumulative Home Price Appreciation for years 2016-2020 is seen as 4.50%, 8.47%, 11.94%, 14.75%, and 18.58%, 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 2176.80 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 31, 2016 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 2089.57 as this post is written

Zillow Q2 2016 Home Price Expectations Survey – Summary & Comments

On May 18, 2016, the Zillow Q2 2016 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

Two excerpts from the Press Release:

Overall, the economists surveyed predicted home price appreciation would be up 4 percent year-over-year at the end of 2016, higher than predictions of 3.7 percent indicated in the previous survey. However, if Sanders or Trump is elected, the economists would lower their expectations both for home values and the overall performance of the U.S. economy.

also:

“Longer-term expectations for U.S. home values continue to trend slowly downward, and are at the lowest levels they’ve been since the market recovery began four years ago,” said Pulsenomics founder Terry Loebs. “After adjusting for expected inflation, the expert panel’s forecast for national home value appreciation averages 1.7 percent annually through 2020.” Although this would mark a significant pull-back from the 3.6 percent inflation-adjusted average annual rate experienced since the start of the recovery in 2012, Loebs said that housing market stakeholders should keep the fading optimism in perspective. “During most of the decade that preceded the onset of the real estate bubble more than fifteen years ago–a relatively normal period for the U.S. housing market–nominal home values didn’t even keep up with inflation.”

Various Q2 2016 Zillow Home Price Expectations Survey charts are available, including that seen below:

Zillow 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 2016 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, who foresees a 14.77% cumulative price decrease through 2020.

The Median Cumulative Home Price Appreciation for years 2016-2020 is seen as 4.00%, 7.64%, 11.14%, 14.31%, and 17.97%, 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 2047.63 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 December) from the CalculatedRisk blog post of February 23, 2016 titled “Real Prices and Price-to-Rent Ratio in December”:

(click on chart to enlarge image)

house prices chart

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1929.80 as this post is written

Zillow Q1 2016 Home Price Expectations Survey – Summary & Comments

On February 17, 2016, the Zillow Q1 2016 Home Price Expectations Survey results were released.  This survey is done on a quarterly basis.

Excerpts from the Press Release:

Prices of newly constructed homes are at historic highs — the median price of new homes sold in December 2015 was almost 7 percent above the pre-recession peak of $267,000 in March 2007.

Overall home price expectations are up from a quarter ago, with survey respondents expecting 3.7 percent home value appreciation in 2016. Respondents expected 3.4 percent appreciation last quarter.

Various Q1 2016 Zillow Home Price Expectations Survey charts are available, including that seen below:

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 2016 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, who foresees a 16.65% cumulative price decrease through 2020.

The Median Cumulative Home Price Appreciation for years 2016-2020 is seen as 3.72%, 7.12%, 10.55%, 13.89%, and 17.62%, 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 1926.82 as this post is written

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