Magazine article Mortgage Banking

Less Optimism over 2010 Home-Price Outlook

Magazine article Mortgage Banking

Less Optimism over 2010 Home-Price Outlook

Article excerpt

Madison, New Jersey-based Macro Markets LLC released results of its June 2010 Home Price Expectations Survey, in which experts see a less rosy picture than they did in May. The monthly survey polls a diverse group of economists, real estate experts, and investment and market strategists on their home-price expectations over the coming five years.

MacroMarkets Co-founder and Chief Economist Robert Shiller said, "Relative to the May survey, the consensus expectation for future U.S. home-price performance is now somewhat less optimistic, most notably for 2010." Shiller added that the June survey found "56 percent of the panelists are projecting negative home-price growth for 2010. Just last month, only 40 percent of the panelists were expecting a cumulative decline for this year."

On a more positive note, the consensus among survey participants is that the U.S. housing market will see double-digit cumulative appreciation between 2010 and the end of 2014.

However, there were a number of views that were either significantly more or less optimistic than the consensus. The consensus view in June over the five-year horizon calls for a 10.46 percent increase in home prices nationally. But for that same time frame, the most pessimistic view foresaw a home-price decline of 18.78 percent, while the most optimistic view expected a home-price increase of 36.74 percent.

Joel Prakken, chairman of Macroeconomic Advisers, St. Louis, and a survey participant, said, "Some striking contrasts in expectations for cumulative change in U. …

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