Here is the Press Release (pdf); the accompanying chart is seen below:
(click on chart image to enlarge)
As one can see from the above chart, the average expectation is that not only has the residential real estate market (nearly) hit a “bottom” as far as pricing; but that steady yet mild appreciation will occur through 2015.
The survey detail (pdf) is interesting. Of the 111 survey respondents, only 9 (of the displayed responses) foresee a cumulative price decrease through 2015; and of those 9, only two, Gary Shilling and Mark Hanson, foresee a double-digit percentage cumulative price drop. Gary Shilling remains the most “bearish” of the survey participants with a forecast of a 19.68% cumulative price decline through 2015.
The Median Cumulative Home Price Appreciation for years 2011-2015 is seen as -.5%, .98%, 4.03%, 7.14%, and 11.15% respectively.
For a variety of reasons, I continue to believe that even the most “bearish” of forecasts (seen in Gary Shilling’s above-referenced forecast) will prove too optimistic in hindsight. Although a 19.68% decline is substantial, from a longer-term historical perspective such a decline is rather tame in light of the wild excesses that occurred over the “bubble” years.
I have written extensively about the residential real estate situation. For a variety of reasons, it is exceedingly complex. While at this time many people have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis. Furthermore, there exists outsized potential for a price decline of severe magnitude, unfortunately. I discussed this downside, based upon historical price activity, in the October 24, 2010 post.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 1310.19 as this post is written
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