Home Prices: Where are they headed over the next 5 years?

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Home Prices: Where are they headed over the next 5 years?

Home Prices: Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Home PricesEvery quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:

Home values will appreciate by 4.0% over the course of 2016, 3.4% in 2017 and 3.0% in the next two years, and finally 2.8% in 2020 (as shown below). That means the average annual appreciation will be 3.2% over the next 5 years.

Home Prices

Home Prices

The prediction for cumulative appreciation slowed slightly from 25.0% to 24.7% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 9.9%.

Home Prices

After more than a decade of head-snapping ups and downs, the housing market has settled into a steadier, less-spectacular groove. In 2015, home prices nationally rose 4%, following a 6.4% hike in 2014, according to Clear Capital, a provider of real estate data and analysis. Kiplinger forecasts that home prices will moderate even more in 2016, rising 3%—at the low end of the historical range.

Phoenix Home Price Averages

Metro Area

Phoenix, Ariz.

Median Sale Price

$205,000

1 Yr Change

7.2%

Change From 2006

-33.0%

Source: Kiplinger

Affordability is going to be a much bigger hindrance going into 2016,” said Daren Blomquist, vice president of research at Irvine, Calif.-based RealtyTrac, a realty research group. Blomquist said that currently about 3% of the nearly 600 U.S. counties his firm tracks have home prices that are “unaffordable” to the average American weekly wage earner (who made $1,056 a week in the first quarter of 2015). If interest rates top 5%, Blomquist expects a surge of unaffordable markets.

Bottom Line

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

 

Home Prices – Provided By:

Jane E. Daley at Scottsdale Real Estate Arizona Luxury Valley Homes

 

About the Author:

LVH
Jeff and Jane Daley started their careers in real estate after taking early retirement from the corporate world in October of 1999. Their success is achieved by way of their core values. MILITARY SERVICE: Jeff is a Vietnam combat veteran and served in in the US Army. He served with distinction, and received multiple citations.