(1/7/2011) Erate Exclusive - A growing number of divergent housing market
forecasts are being filed faster than lenders can forge foreclosures.
Economists jockeying for crystal ball club eminence are creating a "So
what? Who cares?" theater of the absurd.
Pessimistic or optimistic, consumers are still hunkering down and staying
home, both figuratively and financially.
That short-lived, anti-Scrooge spate of holiday-spending madness won't
amount to a hill of beans in the 2011 economy and it certainly won't cure
housing.
We didn't get in this economic malaise overnight. Happy days remain light years away.
That's at least four more years according to a MacroMarkets monthly survey of more than 100 economists
and real estate experts.
Those predictors say housing prices will rise only 7.2 percent by 2014 and
the aggregate value of U.S. single-family homes four years from now will be
roughly $1 trillion less than the economists projected in May.
"For the first time, in this month's survey, our panelists provided their
expectations through 2015. Less than 3 percent of the panel expects negative
change in 2015, and at plus 3.7 percent, the average of the forecasts for
that year is slightly higher than the average annual rate of national home
price appreciation that prevailed in the decade prior to the historic
bubble. Yet, at plus 7.2 percent, the average projection of cumulative home
price performance through 2014 reached its lowest point since survey
inception for the second consecutive month," said Robert Shiller,
MacroMarkets co-founder and chief economist.
Whatever.
MacroMarkets, basing it's future-look on the projected path of the
S&P/Case-Shiller U.S. National Home Price Index, says since the third
quarter of 2006, near the height of the housing boom, prices have fallen 28
percent by the third quarter of this year.
So what? Who cares?
That doesn't preclude Veros Real Estate Solutions from projecting that 40
percent of major metro areas will see appreciation in home prices next year.
Stingy appreciation, but appreciation nonetheless.
The best appreciation will fall below 4 percent.
• San Diego/Carlsbad/San Marcos, CA up 3.5 percent.
• Kennewick/Richland/Pasco, WA, up 3.4 percent.
• Pittsburgh, PA, up 2.7 percent.
• Fargo, ND-MN, up 2.6 percent.
• Washington/Arlington/Alexandria, DC-VA-MD-WV, up 2.5 percent.
Veros says the Central Plains and Texas continue to see positive appreciation with a strengthening trend
spreading to the Midwest.
"San Diego, CA continues its consistent pattern of staying among the
nation's leaders in home value gains. Smaller metro markets with
populations less than 250,000 make up the majority of the better
appreciating markets," says Eric Fox, Veros' vice president of statistical
and economic modeling, crediting affordability factors.
So what? Who cares?
Happy New Year!
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