Home Price Expectation Survey

The Home Price Expectation Survey comes out every quarter. This one came out at the end of the first quarter of 2013. 

The Home Price Expectation Survey is a nation wide panel of 118 economists, real estate experts, investment and marketing strategists. They survey them and then take all of their answers of where prices are going to be over the next five years, then average those numbers together to give us one number. They believe we will have an average home price increase of 4.6 percent in 2013. 

Looking at the historical perspective the pre‐bubble number is 3.6 percent. Meaning houses in this country go up about 3 1/2 percent a year. During the bubble from January 2000 to April ‘07, that number almost tripled to 10.4 percent. That was the anomaly. That wasn’t natural. We went from a 3.6 percent annual appreciation to a 10.4 percent annual appreciation for almost seven years.

What that necessitated was a correction and that’s what’s happened between May of 2007 and October of 2011 where we had a 5.8 percent drop in prices during that period of time.

Since November of 2011 to January of this year prices have actually gone up 5.1 percent. The pendulum had swung too far, but it’s coming back around.

The same 118 leading analysts think that between 2013 through 2017 we’re going to have about a 4.1 percent annual appreciation. Meaning over the next five years the annual appreciation of homes in this country is going to be greater than the historic number of 3.6.

Prices are going up and they’re predicted to go up for the next five years. On average it’s going to be better than what it was before the boom. 

If we break it down year by year we can see again in 2013 they’re projecting a 4.6 percent increase, in 2014 a 4.2 percent and then it’s going to balance out closer to that 3.6 percent historic number. 3.6 percent is the number that it was before the annual appreciation and before there was any boom and bust.

Let’s go back to the Home Price Expectation Survey and break it down even a little bit more. If we go back to the

pre‐bubble appreciation, the pre‐bubble trend, and we look between 2013 to 2017, the economists and the

analysts said that a normal trend line would give us a 22 percent appreciation over that period of time, 2013 through 2017.

It’s important that we realize what we’re seeing here. 118 of the leading analysts in the country combining all of their opinions together show us that prices are going to go up this year and next year pretty substantially and then finally balance out to a normal appreciation.

If any potential home buyers are pondering if they should increase their offer or not should also consider if they don’t get this one and wait six months to get the next one, the price is most likely to be higher and maybe the interest rate too. 

The light green line to the left was what they projected in a survey in 2013. The pink line is what they projected two years ago for 2013. The red line is what they predicted a year ago, and obviously the dark green line is what they currently project

To summarize; 2013 could be the best year you’ve ever had!?