Experts Predict: Home Prices Will Rise
There is good news for real estate agents and home owners trying to sell their homes. After several quarters of decline, housing prices are predicted to turn around. According to a quarterly survey conducted from May 31 to June 14, a vast majority of experts, economists, and real estate analysts surveyed predicted a slight rise in the Case-Shiller U.S. National Home Price Index over the next five years, starting in 2013. The study was conducted by Pulsenomics LLC for the online site Zillow. According to Zillow, this is the first time since the survey began in 2010 that a majority of the experts surveyed were in agreement.
According to the experts, the Index is expected to show an annual decline of 0.4% by the end of 2012, and then will increase about 1.3% in 2013. The average expected rate of increase two years ago was stronger, indicating experts are still coming to terms with the magnitude of the fall out from the housing crisis. Unlike two years ago, there is evidence that real estate prices are on the rebound. Stan Humphries, Chief Economist for Zillow, thinks the convergence of opinions means that we might finally be seeing the bottom to the plummeting real estate market.
If we are finally starting our slow climb up from the bottom, this could be good news for homeowners and real estate agents, though not as good as it might be. Humphries points out that over half of the respondents believe home ownership rates will decline, and that the reasons for this—negative equity due to foreclosures, poor credit for home owners, etc.—mean that the prices will not rise quickly. At 1.3%, the prices are not due to increase enough to help homeowners who are underwater in the near future.
Interestingly, the large number of homes still underwater might help fuel the rise in prices. Many homeowners are unable to sell at this time because they are underwater on their mortgage. This decreases the housing inventory and increases the value of the homes already on the market. Although this situation could help real estate agents and mortgage companies begin to recoup their losses. However, it is still not clear whether the predicted upturn is likely to have for all players in the housing markets or not. It should also be pointed out respondents for the survey conducted for Zillow were from all over the United States, and that the results reflect a national average. The fate of individual markets nationwide is likely to differ.