U.S. home prices will continue to decline through late 2012 or early 2013 as negative equity and weak job growth hinder a real estate recovery, according to a survey by Zillow Inc.
U.S. home prices will continue to decline through late 2012 or early 2013 as negative equity and weak job growth hinder a real estate recovery, according to a survey by Zillow Inc.
After 2013, prices may rise about 3% a year through 2016, which is slightly below appreciation rates experienced before the residential market collapsed, Seattle-based Zillow said in a statement today. The real estate data provider surveyed more than 100 economists, property experts and investment and market strategists.
The survey is based on the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the next five years. Home prices have fallen 31% from a July 2006 peak through September, based on a Case-Shiller index of values in 20 U.S. cities.
“There is a consensus among the nation’s top housing experts that we have not yet reached a bottom and are instead working through a prolonged bottoming process,” Stan Humphries, Zillow’s chief economist, said in the statement. “Negative equity, unemployment and low consumer confidence remain the key factors delaying a true recovery.”
About 29% of U.S. borrowers had negative equity, or owed more than their houses were worth, in the third quarter, Zillow data show. The nation’s jobless rate, 8.6% in November, was 9% or higher for all but three months in the last two years.
Panelists’ expectations for the period ending in 2016 varied widely, Zillow said. The most optimistic quartile projected about 18% growth in home prices over the next five years, while the most pessimistic forecast a 1.4% decline.
--Bloomberg News--
