Readers, what lies ahead for U.S. housing prices in 2011? A new survey suggests economists and real estate experts have grown more pessimistic on the market.
“Expectations Surge for Housing Double Dip” reads the headline on Tuesday’s press release from MacroMarkets LLC of Madison, N.J. The company announced the results of its latest Home Price Expectations Survey of 111 experts, including investment and market analysts.
The average prediction of those surveyed is that the S&P/Case-Shiller U.S. Home Price Index will drop 1.38 percent this year.
“Overall, the sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate,” said Robert Shiller, MacroMarkets co-founder and chief economist. “Now they are expecting only a weak recovery, and even that is not until 2013.”
“This uninspiring view must be influenced by the persistently weak market fundamentals – high unemployment, supply overhang, an unabated foreclosure crisis and constrained mortgage credit,” Shiller said.
In recent months, more experts have begun to project a further drop in prices, said Terry Loebs, MacroMarkets managing director. He attributed the dim views partly to the “double-dead cat bounce” in the economy and housing market in the wake of government stimulus programs.
“In December, only 15 percent of our panelists were projecting that a new post-crash low would materialize for national home prices,” Loebs said. “Now, just three months later, almost 50 percent foresee a double-dip happening this year, and not a single panelist expects national home prices to recover to the pre-bubble trend in the coming 5 years.”
National home prices are now less than 1 percent away from establishing a new post-crash low, he said.
MacroMarkets LLC is a financial technology company that develops financial instruments for investment and risk management. The Wall Street Journal explains the company’s financial products “allow people to bet on the direction of various types of assets, including residential real estate.”
Do you think housing prices will rise or fall this year?
— Robert Digitale