The consensus of analysts surveyed by professor Robert Shiller’s MacroMarkets is that house prices will soon resume their steady upward climb.
Of course, the vast majority of the analysts in the survey didn’t see a crash coming (ever) in 2007. So tuck this away in the “for what it’s worth” file.
(Also for what it’s worth, price behaviour like this after a bubble would be unusual. Usually after a bubble bursts, prices fall way below trend for a while. If this forecast is right, they won’t even have fallen back to trend, let alone below it).
New Survey by MacroMarkets Reveals Housing Recovery Trend Widely Expected by 2011
Madison, NJ, May 19, 2010 – Today MacroMarkets LLC announced that, according to its new
monthly survey, the onset of price recovery in U.S. single family real estate is widely expected by
2011, and home prices will increase by more than 12.4% between 2010 and the end of 2014.
The survey also revealed that home prices nationwide are expected to have risen 4.9% in the 12-
month period ended March 2010, but fallen 0.4% during the most recent quarterly period
measured1. These conclusions reflect an average of the 92 responses received during the first
half of this month from an expert panel of more than one hundred economists, housing analysts,
investment and market strategists.
“The survey results are important because they represent a consensus view among experts with
rich and diverse knowledge. In the May survey they see only the slightest hint of a downdraft in
home prices this year, and after that a respectable uptrend in prices, well ahead of the likely
inflation rate,” said Robert Shiller, MacroMarkets co-founder and Chief Economist. “However,
there were a number of panelists more or less sanguine than average, some significantly so, and
this reflects continuing volatility and risk in the U.S. housing market. The expectations within this
first survey were provided following the end of the homebuyer tax credit and of the Federal
Reserve’s $1.25 trillion mortgage-backed securities purchase program. It will be interesting to
see how panelist views evolve in future months.”
Despite its importance, concrete information and authoritative opinion regarding expected future
home prices has tended to be sporadic and diffuse. This survey is intended as one means to
address this dearth of useful information. The MacroMarkets Home Price Expectations Survey is
based upon the projected path of the S&P/Case-Shiller U.S. National Home Price Index. This
index is updated quarterly by Standard & Poor’s.
Terry Loebs, MacroMarkets Managing Director and co-developer of the survey, said that the
company plans to conduct the study every month. Loebs remarked, “According to the Federal
Reserve, the aggregate value of real estate owned by households at the end of 2009 was $16.6
trillion. This asset class is still larger than U.S.-listed stocks in aggregate market capitalisation
terms. The scale of the U.S. housing market, coupled with the powerful wealth effects of
prevailing home equity levels, warrant close attention to future home prices. For example, if the
cumulative 12.4% improvement in aggregate national home value follows the path that this
panel’s year-by-year averages are suggesting, consumer balance sheets will improve by $2.1
trillion in less than five years.”
More details concerning the May 2010 MacroMarkets Home Price Expectations Survey, including
a table that lists the panelists who provided responses this month, individual panelist
expectations, and survey summary statistics can be found at www.macromarkets.com.