On June 7, 2022, the Zillow Q2 2022 Home Price Expectations Survey results were released. This survey is done on a quarterly basis.
An excerpt from the press release:
As home prices continue to break growth records, a panel of housing experts and economists surveyed by Zillow® does not believe the market is in a bubble. The latest Zillow Home Price Expectations Survey1 polled more than 100 experts from academia, government and the private sector to gather their opinions on the state of the housing market and future growth, inflation forecasts and recession risks.
Of those surveyed, 60% said they do not believe the U.S. housing market is currently in a bubble, compared to 32% who think we are in a bubble, and 8% who are not sure.
Various Q2 2022 Zillow Home Price Expectations Survey charts are available, including that seen below:
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 2022 Home Price Expectations Survey is interesting. Of the 114 survey respondents, only three (of the displayed responses) forecasts a cumulative price decrease through 2026.
The Median Cumulative Home Price Appreciation for years 2022-2026 is seen as 9.70%, 14.41%, 17.96%, 21.94%, and 25.82%, respectively.
For a variety of reasons, I continue to believe that these forecasts will prove far too optimistic in hindsight.
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. Residential real estate is an exceedingly large asset bubble. As such, from these price levels there exists potential for a price decline of outsized magnitude.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 4115.36 as this post is written