MacroMarkets LLC, co-founded by chief economist Robert Shiller, announced the results of the June 2011 Home Price Expectations Survey. This survey compiled 108 responses of a diverse group of economists, housing market analysts, investment and market strategists. The panelists are surveyed on their projections for the path of the S&P/Case-Shiller U.S. National Home Price Index over the coming five years.
What were the panelist’s responses? Nearly two-thirds of panelists polled say the U.S. housing market is at a historic turning point. More than half say they expect national home prices to reach bottom this year and remain stable through 2015.
See the MacroMarkets press release here: After Double-Dip, Many Forecasters Predict a 2011 Turning Point for U.S. Housing
See also Home Price Survey
Hudson
Personally, i think the outlook in there is wishful thinking at best. I’m hoping for a decent amount of carnage in the next 12 months and i’ll be looking to move into something in 12-18 months.
Sliced Rye
This prediction may be sensible for most of the country. However, for Nevada, aka Ground Zero of the Greatest Bubble in History,
the State with the highest unemployment rate,
the State with the highest bankruptcy rate,
the State with the highest foreclosure rate,
and the state with highest percentage of upside down house debtors, I suggest this prediction is far too optimistic.
Guy Johnson
Hudson,
From the release: “Looking at expected housing market performance through
the five year period ending 2015, the most optimistic quartile of panelists projects 15.3% average price growth, while the most pessimistic quartile of panelists projects 6.0% average price erosion from Q4 2010 levels.”
Zen
One thing seems certain, that is that we are much closer to the market bottom than the previous top. If not, this valley just may be full of sagebrush once again. In general, I share the sentiments of the survey nationally. Locally, the jury is still out. Our economy is harder hit than most. Housing is paid for by people now, not magic fairy dust. People need income to pay for it. We need to see some visible road to economic recovery, before I will feel confident in a housing bottom in Reno/Sparks.
bonanza
You may be right Sliced Rye. On the other hand maybe Reno has overcorrected. Houses are a bargain. Maybe Reno has a lot to gain from people and jobs leaving California.
Sully
My general feeling is somewhere around “we’re getting close” 🙂
Every time Bernanke prints more funny muny, the rules change. The stuff that’s supposed to go up, goes down and causes other items to go up ‘unexpectedly’. Of course, everything that doesn’t go their way is unexpected, as they never give it any thought in the first place. My feeling is nothing is going to happen until the government gets out of the way and lets nature take its course.
Martin
Back in 2005, it was standard realtor pablum that the prices of houses in Reno could not decline because houses here were so cheap relative to California and that the great exodus of Californians moving in Reno would prop up Reno housing values forever.
Uh-huh.
So now that such theory has been totally debunked by the fact that Reno prices have dropped 60% since 2005, the new realtor pablum is that because Reno houses are NOW so cheap relative to California that surely they cannot decline in value any further because they will be propped up, from this point forward, by the exodus of Californians moving to Reno.
Uh-huh.
Carleton
I love this. We have a panel consisting of a “diverse group of economists.” 25% of them say prices will rise by 15% over the next 5 years. 25% of them say prices will decline by 6% over the next 5 years. The other 50% are somehwere in the middle.
If that is not a definite maybe, then I don’t know what is.
Scott
I’d love to be an economist. With the possible exception of being a tv weatherman, what other job is there where you can be consistently wrong and still keep your job?
Phil
“Our economy is harder hit than most.”
Zen wins the award for the understatement of the week.
Carney
I hereby declare myself to be “an economist.” And here is my irrefutable prediction for the Reno housing market over the next 5 years:
Prices will either go up or they will go down. Unless they stay the same.
I believe that I have now qualified myself to serve on this esteemed panel.
Thank you.
inclinejj
There are a couple areas that I know for a fact are doing quite well Palo Alto due to Facebook and Silicon Valley. Higher end areas like Portola Valley and Atherton once again due to Google and Facebook-Silicion Valley money. Apple included.
Prices will either going up or down is like the weather man saying..It’s either going to rain or be nice. Or a classic George Carlin line. Tonight it will be dark, followed by light in the am!!!
Gadfly
While I would not be surprised if the U.S. saw some increase in housing prices over the next few years, predicting a 15% increase is ludicrous. Economist in the most delusional, err, optimistic quartile must be interviewing for jobs with NAR.
Zen
“Zen wins the award for the understatement of the week.”
Good point Phil. In retrospect, I should have said: Our economy is amongst the very hardest hit. Even this may arguably be a bit of an understatement, but probably not enough for you to call me out on it. Way to keep me on my toes.
Lynne B
It seems that the only businesses we attract are warehouse operations mostly staffed by $12 an hour employees, new branches of chain eateries (which will probably fold as quickly as the ones they are replacing) and more Walmart stores. It doesn’t take an economist to tell you that few of those employees will be buying homes any time soon. I recently spoke to someone who does expansion/relocation analysis for businesses, and he said Reno is pretty much ‘off the table’ for a few reasons: 1) high energy cost, 2) existing employees simply do not want to relocate here 3) poorly educated local work force
Sully
Lynne that was somewhat of an open ended statement.
High energy costs – compared to who? Not California I hope!
Existing employees simply don’t want to move? or can’t because they are still underwater on their homes?
Poorly educated work force – again compared to who and for what type of jobs? The bay area has roughly 80% of all the PhD’s in the nation (last time I checked) – no one can possibly compare to that.
Additionally, I have a former customer who moved to NV four years ago. Since then he has increased the size of his business by 50% and recently completed a second building. He moved from Santa Clara, which has dirt cheap electric rates compared to PG&E.
So – what area was this relocation expert comparing Nevada to?
Lynne B
High energy costs – 2nd highest in the west: http://www.eia.gov/cneaf/electricity/epm/table5_6_a.html (only Western state with a higher energy cost is California)
Poorly Educated workforce: 30% of Nevadan’s have a college degree, the US average is 37.9. California and Oregon are a bit over 38%. http://www.luminafoundation.org/publications/A_stronger_nation.pdf
Employees don’t want to relocate here: This is undoubtedly highly subjective and part of it might be that people can’t sell their homes, or that they are afraid to buy a home in Nevada when they can’t figure out where the bottom of the market is.. My friend also told me that many employees are not willing to transfer to a ‘right to work’ state where they can be terminated without cause & that many employees express concern about the quality of Nevada schools.
The confirmation that he is at least partly correct in his assessment seems to be confirmed by the lack of new businesses that have relocated to Nevada during the past decade.
Sully
Lynne, has he said how many businesses have relocated to California in the last decade?
Lynne B
Sully, he didn’t say..but in one of the email exchanges I had with him he sent me this: http://www.cnbc.com/id/37516043 His point was that low taxes are great, but taxes are not and never will be the only factor that goes into the decision making process of bringing a business into a state.
Sully
Lynne, I agree with the taxes bit. The other items he mentioned would be subjective also, depending on the type of business that was relocating here. Example, a light manufacturing business would do well (the previous example I gave). Energy costs are also dependent on amount used.
It has been discussed several times on this blog that the tax base here needs to be brought into the 21th Century. As far as education goes, I think that is somewhat overrated, again that would be subjective depending on the type of business moving here.
Lynne B
I agree that much of it is subjective, as far as education I think the importance is that high tech and R&D usually have very good paying jobs & require an educated work force, warehouse operations not so much, but those are the $12 an hour jobs and those folks won’t be buying homes any time soon at that wage..