Luxury Valley Homes Arizona Real Estate Blog: May 2016

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%.

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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 - http://www.WinfieldRealEstateArizona.com 

Comment balloon 0 commentsJane & Jeff Daley, PhD • May 24 2016 10:09AM
Home Prices: Where are they headed over the next 5 years?
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