More analysts expect double dip

National home prices near post-crash low

Nearly half of economists, real estate experts and investment strategists polled by MacroMarkets LLC this month said they now expect national home prices to "double dip" this year and hit a new post-crash low.

MacroMarkets polls more than 100 housing experts with a wide range of views, including FusionIQ CEO Barry Riholtz, Moody's Analytics economists Mark Zandi and Celia Chen, National Association of REALTORS® Chief Economist Lawrence Yun, Freddie Mac Chief Economist Frank Nothaft, and Rosen Consulting Group's Kenneth Rosen.

Panelists are asked to project the path of the Standard & Poor's/Case-Shiller U.S. National Home Price Index over the coming five years. In December, only 15 percent of the panel said they expected home prices to double dip.

Now, with national home prices less than 1 percent away from establishing a new post-crash low, on average the panelists expect that national home home prices will fall by 1.38 percent in 2011, before appreciating by 1.26 percent in 2012, 2.72 percent in 2013, 3.19 percent in 2014, and 3.42 percent in 2015.

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Persistently weak market fundamentals are the likely driver of this "uninspiring view" for a weak recovery that doesn't take hold until 2013, said MacroMarkets Chief Economist Robert Shiller in a statement.

High unemployment, supply overhang, an unabated foreclosure crisis and constrained mortgage credit continue to be a drag on prices, Shiller said.

Eleven of 20 markets tracked in the S&P/Case-Shiller 20-city composite hit new lows for the downturn during the fourth quarter.

There's a considerable range of opinion on the MacroMarket panel about where home prices are headed. Three panelists expect cumulative growth in national home prices of 20 percent or more through 2015, compared with the 9.64 percent average for the panel as a whole.

Optimists include Bill Cheney, chief economist for John Hancock Financial, who expects national home prices to surge 3 percent this year and 5 percent in 2012 and 2013; Joel Naroff of Naroff Economic Advisors Inc., who expects national home prices to rise by a cumulative 24.19 percent during the next five years; and Jim O'Sullivan, chief economist for MF Global.

At the other end of the spectrum, Gary Shilling, president of A. Gary Shilling & Co., thinks national home prices will fall 19.68 percent through 2015, with an 11 percent drop this year and 5 percent declines in 2012 and 2013.

Mark Hanson of Hanson Advisors predicts national home prices won't hit bottom until 2015, falling 8.8 percent this year, 6.2 percent next year, and 3.7 percent in 2013. Hanson is projecting prices will fall a cumulative 18.44 percent through 2015.

NAR's Yun is slightly more optimistic than the average for the panel, predicting that national home prices will rise a cumulative 12 percent through 2015. Yun is predicting that national home prices will be flat this year, rising 2.5 percent in 2012 and 3 percent in each of the following three years.

From his perspective at Freddie Mac, Nothaft is slightly less optimistic than the panel as a whole, predicting 8.12 percent cumulative growth in national home prices from 2011 through 2015. Nothaft projects national home prices will fall 2 percent this year and stay flat next year before rising 1 percent in 2013 and 3 percent in 2014 and 2015.

Inman News

10 Places for Home Prices to Rise in 2011

While home prices are expected to continue to fall in most metro areas, Clear Capital’s Home Data Index report says a few cities are already on the rebound and showing some gains in home values. 

“There really is this segmentation of these markets occurring where the one-size-fits-all national level numbers to represent all numbers really isn’t valid anymore,” Alex Villacorta, senior statistician at Clear Capital, told MSNBC. “Overall we’re seeing prices start to stabilize going into 2011, but unfortunately some of those markets will stabilize in the downward direction where others will see a sustained recovery.”

Clear Capital takes into account unemployment rates, foreclosure rates, and real estate inventory in its index.

The following is a list of 10 cities that Clear Capital expects will rise in property value in 2011: 

1. Washington, D.C.: 6.5 percent price increase 
2. Houston: 3.6 percent price increase
3. Honolulu: 3.4 percent price increase
4. Memphis, Tenn.: 3.2 percent price increase 
5. Columbus, Ohio: 2.1 percent price increase 
6. Dallas: 1.4 percent price increase 
7. New York: 1.3 percent price increase 
8. Birmingham, Ala.: 0.9 percent price increase 
9. Pittsburgh: 0.8 percent price increase 
10. New Orleans: 0.5 percent price increase

Meanwhile, Clear Capital reports that real estate markets in Florida and the Western parts of the U.S.—such as cities in Arizona and “Breadbasket metros” like Oklahoma City, Okla., and Dayton, Ohio—likely will see the largest price drops in home values over the year. Virginia Beach, Va., is expected to have the highest drop in 2011, with a 12.8 percent price decrease, according to Clear Capital report. 

MSNBC

Interactive Map of Your Town's Median Home Price

Click here and zoom in to your metropolitan statistical area to get the latest quarterly median home price for your market, and its percentage change from the previous quarter. Now includes median commute times for each metro area!

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How Much are Home Prices Dropping?

It depends on the indicator you're looking at, NAR Research says. Among the main indicators are those provided by NAR, Freddie Mac, the Federal Housing Finance Agency (Formerly OFHEO), and Case-Schiller. Each one is different because it looks at different data sets and uses different assumptions. An explanation of the differences, which will help you interpret news and other reports on home price trends, is available online from NAR.