118 Experts Predict Annual Home Value Growth To Exceed Pre-Bubble Rates Over
Next Five Years
Survey Benchmark Changes; Path of U.S. Zillow Home Value Index Predicted to
Show Cumulative 22 Percent Increase Through 2017
SEATTLE, March 18, 2013
SEATTLE, March 18, 2013 /PRNewswire/ -- A nationwide panel of more than 100
professional forecasters expects home values to end 2013 up an average of 4.6
percent and rise cumulatively by 22 percent, on average, over the next five
years, according to the first quarter Zillow® Home Price Expectations Survey.
Additionally, a majority of panelists indicated support for policies that
would allow certain underwater homeowners to refinance at today's low rates.
The survey of 118 economists, real estate experts and investment and market
strategists was sponsored by leading real estate information marketplace
Zillow, Inc. (NASDAQ: Z) and conducted by Pulsenomics LLC. This is the first
survey edition that utilized the U.S. Zillow Home Value Index (ZHVI)^[i] as
the reference benchmark for the panel's home price expectations^[ii].
Survey respondents predicted home values will rise another 4.2 percent on
average in 2014, before moderating somewhat to annual appreciation rates
between 3.6 percent and 3.8 percent for 2015, 2016 and 2017. On average,
panelists predicted home values to rise 4.1 percent annually from 2013 through
2017, exceeding the pre-housing bubble (1987-1999) average annual appreciation
rate of 3.6 percent. This is the first time the predicted average annual
growth rate for the next five years has surpassed pre-bubble levels since the
survey's inception three years ago.
"The panel is quite bullish on home prices near-term, considering a pre-bubble
average appreciation rate of 3.6 percent per year," said Zillow Chief
Economist Dr. Stan Humphries. "That said, their expectations are a bit shy of
the home value gains of 5.5 percent that we saw in 2012, implying some
moderation in the pace of gains. The panel expectations are consistent with
continued strong home value growth this year fueled by tighter-than-normal
inventory of for-sale homes and robust demand attributable to high
affordability and a stronger general economy."
The most optimistic quartile^[iii] of panelists predicted a 6.1 percent
increase in home values in 2013, on average, while the most pessimistic^[iv]
predicted an average increase of 3 percent. Through 2017, panelists predicted
cumulative home value changes of 22 percent, on average. Expectations for
cumulative home value change projections ranged from 34.2 percent among the
most optimistic quartileto11.7 percent among the most pessimistic, on
GSE Wind-Down Period and Refinance Options For Underwater Borrowers
The first quarter 2013 Zillow Home Price Expectations Survey asked the panel
to indicate their view of a reasonable timeframe for "winding-down" government
sponsored enterprises (GSEs) Fannie Mae and Freddie Mac; and to weigh in on
the debate over the merits of providing new refinancing options to underwater
homeowners who are current on their mortgage payments.
The majority of panelists (59 percent) indicated that a reasonable and
appropriate timeframe for winding-down the GSEs is within the next five years.
On the opposite ends of the spectrum, 13 percent suggested a timeframe within
the next two years, and 10 percent said they believe a period of more than 10
years is sensible.
Existing proposals that would facilitate refinancing of certain underwater
borrowers include the Responsible Homeowner Refinancing Act of 2012, sponsored
by Sens. Barbara Boxer (D-Calif.) and Robert Menendez (D-N.J.), and the
Rebuilding Equity Act sponsored by Sen. Jeff Merkley (D-Ore.). The majority of
respondents said they supported these types of policy initiatives.
"More than four of every five supporters of these refinancing proposals said
they believe that borrowers who have demonstrated an ability to make their
payments in recent years would pose little or no incremental risk to taxpayers
if they refinanced. Two-thirds of supporters said they believe that the lower
monthly payments would create a significant stimulus for the economy," said
Terry Loebs, founder of Pulsenomics LLC. "But the 41 percent of panel
respondents who do not support these plans also hold strong views. More than
two-thirds of them said they believe that rewriting loan contracts is bad
policy in general, and that lowered monthly payments for borrowers ultimately
translate into taxpayer and investor losses."
Additional details regarding this portion of the survey are available at
This is the 17th edition of the Home Price Expectations Survey. It was
conducted from Feb. 22, 2013 through March 7, 2013 by Pulsenomics LLC on
behalf of Zillow, Inc.
For full survey results and graphics, please visit Zillow Real Estate Research
Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on
mobile and the Web, with a complementary portfolio of brands and products that
help people find vital information about homes, and connect with the best
local professionals. In addition, Zillow operates an industry-leading
economics and analytics bureau led by Zillow's Chief Economist Dr. Stan
Humphries. Dr. Humphries and his team of economists and data analysts produce
extensive housing data and research covering more than 350 markets at Zillow
Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists, real estate
experts and investment and market strategists to predict the path of the
Zillow Home Value Index over the next five years. The Zillow, Inc. portfolio
includesZillow.com®,Zillow Mobile, Zillow Mortgage Marketplace,Zillow
Rentals, Zillow Digs™, Postlets®, Diverse Solutions®, Buyfolio™, Mortech™ and
HotPads™. The company is headquartered in Seattle.
Zillow.com, Zillow, Zestimate, Postlets and Diverse Solutions are registered
trademarks of Zillow, Inc. Buyfolio, Mortech, HotPads and Digs are trademarks
of Zillow, Inc.
Pulsenomics LLC is an independent research and consulting firm that
specializes in data analytics, new product and index development for
institutional clients in the financial and real estate arenas. Pulsenomics
also designs and manages expert surveys and consumer polls to identify trends
and expectations that are relevant to effective business management and
monitoring economic health.
[i] The Zillow Home Value Index is the median Zestimate® valuation for a given
geographic area on a given day and includes the value of all single-family
residences, condominiums and cooperatives, regardless of whether they sold
within a given period. It is expressed in dollars, and seasonally adjusted.
[ii] Previously, the survey benchmark was the S&P/Case-Shiller U.S. National
Home Price Index (single-family properties, not seasonally-adjusted). For a
summary comparison of the survey benchmarks prepared by Pulsenomics, please
[iii] Based on the 25 percent most optimistic panelists in terms of cumulative
home price change through 2017.
[iv] Based on the 25 percent most pessimistic panelists in terms of cumulative
home price change through 2017.
SOURCE Zillow, Inc.
Contact: Cory Hopkins, Zillow, +1-206-757-2701 or firstname.lastname@example.org
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