September 2012 Zillow Home Price Expectations Survey Results

Posted by: Svenja Gudell    Tags:      Posted date:  September 21, 2012  

The September 2012 edition of the Zillow Home Price Expectation Survey shows that professional forecasters expect home prices to rise by an average of 2.3 percent during 2012. The survey was compiled from 113 responses by a diverse group of economists, real estate experts and investment and market strategists. Overall, this reflects quite a change in attitude toward home prices this year given that three months ago (for the June survey), economists thought home prices were going to fall by 0.4 percent. The lowest price projection among panelist responses was a depreciation of 2.5 percent by the end of this year, while the highest was an appreciation of 9.2 percent.

Figure 1 shows the forecasted, cumulative home price changes by quartile among panelists. Even the bottom quartile shows that opinions have turned much more favorable, with an appreciation of 0.3 percent forecasted for 2012, while the top quartile predicts an appreciation of 4.4 percent by year’s end.

Table 1 below shows responses from the five most pessimistic and five most optimistic real estate experts in the survey (assessed cumulatively over the full five-year horizon). The estimated cumulative home price expectation ranges from a total depreciation of 15.2 percent by 2016 by Gary Shilling on the pessimistic end to 31.6 percent appreciation on the optimistic end by Nathaniel Karp.

Earlier this year, Zillow and Pulsenomics gave out the Zillow Home Price Expectation Survey 2010-2011 Crystal Ball Awards. And the winners were:

  • Nariman Behravesh (IHS Global Insight):   #1 for the 2-Year Horizon Forecast (2010 – 2011)
  • Dan Greenhaus (BTIG LLC): #1 for the 1-Year Horizon Forecast (2011)
  • Edward Pierzak (Henderson Global Investors): #1 for the 1-Year Horizon Forecast (2010)

In the top 10 for the 1-Year and 2-Year Horizon Forecasts (2010, 2011 and 2010 – 2011):

  • Paul Dales (Capital Economics Ltd)
  • John McIlwain (Urban Land Institute)
  • Edward Pierzak (Henderson Global Investors)
  • Edward Pinto (American Enterprise Institute)

In the top 5 for the 1-Year and 2-Year Horizon Forecasts (2010, 2011 and 2010 – 2011):

  • Mark Zandi / Celia Chen (Moody’s Analytics)

Here are the forecasts of these individuals, who have demonstrated their accuracy in the past:

Their forecasts lie somewhere in the middle of the spectrum, however they are on average a bit more pessimistic in the near future than the survey participants, in general. For the 2012, these six panelists believe home prices will appreciate by 0.6 percent, on average; and for 2013, home prices are believed to appreciate by 1 percent. Zillow forecasted that the Case-Shiller National Home Price Index would appreciate by 3 percent by the end of this year, and cumulatively appreciate by almost 13 percent by 2016.

For further info and more details on which supplemental questions we asked, please see the press release here.

About the author
Svenja Gudell
Svenja is the Director of Economic Research at Zillow. To learn more about Svenja, click here