U.S. home prices will continue to decline through late 2012 or early 2013 as negative equity and weak job growth hinder a real estate recovery, according to a survey by Zillow Inc.
After 2013, prices may rise about 3 percent a year through 2016, which is slightly below appreciation rates experienced before the residential market collapsed, Seattle-based Zillow said in a statement today. The real estate data provider surveyed more than 100 economists, property experts and investment and market strategists.
The survey is based on the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the next five years. Home prices have fallen 31 percent from a July 2006 peak through September, based on a Case-Shiller index of values in 20 U.S. cities.
“There is a consensus among the nation’s top housing experts that we have not yet reached a bottom and are instead working through a prolonged bottoming process,” Stan Humphries, Zillow’s chief economist, said in the statement. “Negative equity, unemployment and low consumer confidence remain the key factors delaying a true recovery.”
About 29 percent of U.S. borrowers had negative equity, or owed more than their houses were worth, in the third quarter, Zillow data show. The nation’s jobless rate, 8.6 percent in November, was 9 percent or higher for all but three months in the last two years.
Panelists’ expectations for the period ending in 2016 varied widely, Zillow said. The most optimistic quartile projected about 18 percent growth in home prices over the next five years, while the most pessimistic forecast a 1.4 percent decline.