Economists expect home prices to fall 0.7% this year, according to the March 2012 Zillow Home Price Expectations Survey. This prediction is more negative than the 0.2% decline predicted in Zillow's December 2011 survey.
However, most of the economists surveyed by Zillow forecast positive home price appreciation in 2013, although the rate of expected appreciation is more muted now (1.39% annual change) than in December 2011 (1.75%). The survey, which is sponsored by Zillow and conducted by Pulsenomics LLC, is based on the projected path of the Standard & Poor's/Case-Shiller U.S. National Home Price Index during the coming five years.
‘The fourth-quarter drop in the national Case-Shiller Index was sharper than some expected and is the likely reason so many of the economists in the survey revised their forecasts downward,’ says Zillow Chief Economist Stan Humphries. ‘Looking at the longer history of these forecasts by top economists, the bottom in home prices always seems just around the corner but never quite here. Conditions across the country vary considerably. Some markets have already hit bottom and are experiencing tight inventory and multiple offers, while foreclosures and negative equity continue to pull down the housing market in many other parts of the country.’