Thursday, May 20, 2010

MacroMarkets Survey of 92 Experts Shows Housing Price Recovery Widely Expected by 2011

From MacroMarkets yesterday:

"According to a new monthly survey, the onset of price recovery in U.S. single family real estate is widely expected by 2011, and home prices will increase by more than 12.4% between 2010 and the end of 2014. The survey also revealed that home prices nationwide are expected to have risen 4.9% in the 12-month period ended March 2010, but fallen 0.4% during the most recent quarterly period measured. These conclusions reflect an average of the 92 responses received during the first half of this month from an expert panel of more than one hundred economists, housing analysts, investment and market strategists."

“The survey results are important because they represent a consensus view among experts with rich and diverse knowledge. In the May survey they see only the slightest hint of a downdraft in home prices this year, and after that a respectable uptrend in prices, well ahead of the likely inflation rate,” said Robert Shiller, MacroMarkets co-founder and Chief Economist. “However, there were a number of panelists more or less sanguine than average, some significantly so, and this reflects continuing volatility and risk in the U.S. housing market. The expectations within this first survey were provided following the end of the homebuyer tax credit and of the Federal Reserve’s $1.25 trillion mortgage-backed securities purchase program. It will be interesting to see how panelist views evolve in future months.”

HT: Tony Hull


At 5/20/2010 4:16 PM, Blogger Junkyard_hawg1985 said...

I hope the consensus among economists is better than they usually have. Typically, when economists have consensus on an item like the diection of interest rates; that consensus is wrong.

At 5/20/2010 4:45 PM, Anonymous morganovich said...


agreed. this sort of consensus is nearly always a contrary indicator.

how did this same group do predicting the last downturn?

At 5/20/2010 5:05 PM, Blogger misterjosh said...

It's hard to reconcile the different headlines Housing recovery here, but elsewhere I see "record delinquencies & foreclosures"

At 5/20/2010 5:23 PM, Anonymous Volokh said...

Opinions of people who play no part in the buying, selling, or funding of house and who have no money riding on the outcome of their prognostication.

Since when have surveys been useful.

Oh, let me guess... the stock market was down today. Look at the monkey!

At 5/20/2010 5:31 PM, Anonymous Tzianden said...

This graph suggests that four years of house purchase vintages (2004 to 2008) will remain under water for at least another four years and about ten years of house purchasers will have a negative return on their housing investment throughout the forecast period.

So instead of drowning under 50 feet of water they'll be drowning under 10 feet of water.

How long can you hold your breath?

At 5/20/2010 7:01 PM, Anonymous Anonymous said...

Would be a lot more meaningful if this were an annual survey with some track record. But they do not have a prior survey on their website, so saying "92 experts" isn't quite enough.

12.4% over 4 years is pretty close to the long term historical average which is pretty close to the long run inflation rate. I'd expect that kind of consensus estimate from a first year econ class as well. Show me the forecast high and low lines.

At 5/20/2010 7:06 PM, Blogger grant said...

Isn't MP saying that the looooooooong term trend in housing is up.That the extremely efficient home building industry oversupplied the housing market and it is going to take time for excess stock to be consumed into the long term owner market.

At 5/20/2010 7:24 PM, Anonymous Anonymous said...

Legendary stock market technician and strategist Bob Farrell:

"When all the experts and forecasts agree -- something else is going to happen."

A consensus view should provide little comfort but from a contrarian perspective.

At 5/20/2010 7:26 PM, Anonymous Anonymous said...

Isn't MP saying that the looooooooong term trend in housing is up.That the extremely efficient home building industry oversupplied the housing market ...

Get over yourself.

At 5/20/2010 7:31 PM, Anonymous Anonymous said...

What about the TED spread?

It's not looking good lately.

At 5/21/2010 12:46 AM, Blogger Michael said...

Is this a good thing? Housing got over priced and the industry (government) financing it had to engage in ever more reckless ways to finance it. And criminal. We now know the government was selling sub-prime as prime to the market.

But hey, lets do it all over again.

At 5/21/2010 4:41 AM, Anonymous niknaknoo said...

What did these so called 'experts' have to say 3 years ago? Experts my arse!

At 5/23/2010 4:25 AM, Anonymous grant said...

Yes, there was Michael Milken and the junk bond crash in previous financial history.
I think he was put on trial found guilty and went to jail for his crime of selling millions of junk bonds before they dropped in value or became worthless.
Do a google/wiki and see what comes up.


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