On April 4, 2023, the Zillow Q1 2023 Home Price Expectations Survey results were released. This survey is done on a quarterly basis.
An excerpt from the press release:
Respondents expect prices to fall 2% nationally this year, which implies that the value of the US housing market will fall to $46.9 trillion from $47.9 trillion at the end of 2022, per results of the poll conducted by housing analytics firm Pulsenomics.
While they see a meager gain of just 1.2% in 2024, the recovery will pick up steam in the following three years, when prices are forecast to increase 4% annually.
Various Q1 2023 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 (largely) continually climb.
The detail of the Q1 2023 Home Price Expectations Survey is interesting. Of the 107 survey respondents, only 14 (of the displayed responses) forecasts a cumulative price decrease through 2027.
The Median Cumulative Home Price Appreciation for years 2023-2027 is seen as -2.2%, -.62%, 2.75%, 6.86%, and 10.83%, 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 4080.04 as this post is written