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