A recent survey by Zillow of over 100 professional economic forecasters produced a prediction of a fairly fast recovery in housing prices - about 4.1% per year over the next five years. That's above the historic (pre-bubble) rate of 3.4% that had been in place for decades. If the Zillow prediction proves true the housing market will recover 22% of the lost value by 2018.
Locally we have seen an even higher rate of recovery - in the 8%+ range, mainly driven by the extremely tight inventory situation. There's currently too much money chasing too few homes. That will change as soon as the Spring rush of listing occurs and more product in on the market.
For now sellers are enjoying a market with multiple bids on most houses and bidding wars are not uncommon. Cash buyers have also dominated the low end of the market for some time, squeezing out many first time buyers. Buyers are just experiencing frustration.
Of course no one can predict with any certainty what will happen and the economic recovery overall is still fragile; however, the current trends in the market certainly seem to support this optimism. You can read the entire Zillow report by clicking here.
One graphic that they have in the report is especially powerful - it shows the market zooming along and then the bottom dropping out. I guess we all know that that felt like.
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