A significant majority of the 108 economists and experts participating in MacroMarkets June Price Home Expectations panel believe that the bottom for home prices arrived in the first quarter or will arrive sometime before year end.
Despite persistent macroeconomic uncertainty and unprecedented housing market dysfunction, almost 2/3 of the panelists see the U. S. residential real estate market is at an historic turning point, says Robert Shiller, MacroMarkets co-founder and chief economist.
However, expectations for the pace of recovery fell. The group of 69 panelists who are currently forecasting a 2011 turning point predict less than 2% average annual growth in nominal home prices over the 5 year period ending December 2015. The average expected cumulative home price change between quarter 4 2010 and quarter 4 2015 is just 5.71%, $1.2 trillion less in aggregate U. S. single family housing wealth at the end of 2015 than projected just six months ago.
Terry Loebs, MacroMarkets managing director confirmed that a wide variety of individual views continue to be expressed by the panel. The most optimistic panelists project 15.3% average price growth between 2010 and 2015. The most pessimistic panelists project 6% average price erosion from 2010 levels. The spread is huge. Which will it be?
Economic growth would certainly help. With jobs, the real estate market will have a chance to recover. Market analysis shows that most of the Chicagoland area is currently stable, not depressed as some areas of the U. S. are. There is hope for the future.