Where are home prices headed?

It is always good to see what the experts are predicting.  Today, we have compiled the thoughts of five industry players to help show where the experts think home prices are headed for the rest of this year and going into 2011.


Three of the major housing price indexes:

Altos Research:
“The market, right now, is a veritable case study of the law of supply and demand. Right now, there’s a whole lot of supply, but very, very little demand. The buyers that drove a flurry of activity during the spring have left a deafening silence in their wake … Increases in inventory nationwide show that demand simply isn’t there. As the market continues to correct itself, and as we head into the seasonally weak fall and winter months, expect more increases in inventory, and likely deepening declines in asking prices.”

Radar Logic:
“It is our belief that housing prices will decrease in the autumn, perhaps precipitously, and that may cause a second dip in the U.S. economy … And home buyers are not demonstrating any perceivable confidence that we have found the bottom, yet. As we begin to see the data for the fall, we expect it will be soft, that volumes and prices will move lower … If we are right, the odds of a double dip in the economy may well be more than one in four.”

Mark Fleming, chief economist for CoreLogic:
“Home price volatility and collateral risk remain very high. The stabilization phase and policy intervention since the spring of 2009 has run its course. Prices are expected to further moderately decline as the economy remains weak through the fall.”

Two other housing experts:

Ethan Harris, coordinator of global economics at Bank of America Merrill Lynch:

“I don’t think the housing market will double-dip. What we’re seeing in housing is a bottoming out at very low levels of activity. So, we expect a very long U-shaped recovery in housing in the next year or two. We expect home prices to be down slightly across the country. We expect construction to be essentially flat, and we expect continued very high levels of home foreclosures. Right now the housing market is in a standoff with very cheap financing and very low prices, encouraging buyers, but a flood of foreclosures offsetting that demand. A true recovery in the housing market isn’t likely until 2012, when we see substantial improvement in the foreclosure picture.”

Michael Carliner, research affiliate at the Harvard University Joint Center for Housing Studies:
“Although existing home sales data, based on closings, haven’t yet shown the effect of the end of the tax credit, new home sales and contracts on existing homes have both fallen to record lows following the end of the tax credits.

The reality is that the real estate market won’t fully recover until builders and consumers start believing once again that housing is a relatively safe investment with reasonable returns, and that will take some time.”

We hope that information like this enables you to more easily understand your options in today’s volatile housing market.