Long-term outlook for U.S. home values dims

The long-term outlook for U.S. home values has diminished to a three-year low, and a clear-cut consensus among the experts remains elusive at the national level. This, according to The Q4 edition of the Zillow Home Price Expectations Survey published today. (Pulsenomics conducted the survey and collected 108 responses).

Based on the projections of the most optimistic quartile of forecasters, home values nationally will increase 4.7 percent next year and surpass their May 2007 peak levels in April 2017. In contrast, the data collected from the panel’s most pessimistic respondents expect only 2.3 percent appreciation for next year, and even more subdued gains after that–a path that would delay the market’s eclipse of the bubble peak until September 2019.

We also asked our expert panel to assess the “bubble risk” of the 20 largest U.S. metropolitan area housing markets. 66 of the panelists weighed-in and the results are summarized here:

The divergence of expert views regarding the existence of regional price bubbles and the path of future home values is a reminder that the U.S. housing sector has yet to heal fully more than eight years after the epic bust, and that significant risks have re-emerged within certain large metropolitan area housing markets.