Another forecast calls for lower home prices.
A survey of more than 100 real estate economists and professionals by Zillow and Pulsenomics Llc. predicts a slight – 0.3% year-over-year – decline in home prices around the country.
It’s the first such negative forecast by the analysts since the Great Recession.
Early in the year, the economists had been predicting a 3.3% gain in nationwide home prices in 2020.
This week CoreLogic changed its forecast to call for a 1.3% decline nationwide.
The predictions of home price decreases comes as a result of the COVID-19 pandemic.
“This is the first time since 2012 that the panel-wide price outlook has turned negative, and the quarter-to-quarter swing in expectations is the largest we’ve seen in more than a decade,” Terry Loebs, founder of Pulsenomics, said in the report. “Longer term, the outlook for home values nationwide is mixed – price projections for 2022 and beyond actually inched higher from levels recorded prior to the Covid-19 outbreak.
“However, nearly seven in 10 experts now indicate that their five-year forecast has downside risk,” he said. “Last quarter, fewer than four in ten panelists foresaw downside – of course, that was before the Covid-19 crisis, its economic devastation and unprecedented government response.”
Even when home prices start rising again, the outlook is for scant gains in the years ahead.
Zillow’s internal forecast foresees a 1.8% drop in U.S. home prices by October 2020.
Prices are expected to rebound to pre pandemic levels by late 2021.
Zillow researchers ay that nationwide home sales plunged by 44% in April.
Analysts are hoping that the home sales lost during the pandemic will be made up later this year and beyond.
“Experts’ forecasts on the future of housing vary widely at this early stage of the recovery,” said Skylar Olsen, Zillow’s senior principal economist. “Our forecast has become more optimistic as we ingest new data and watch pending sales pick up faster than expected.
“What does seem more consistent in this wisdom of crowds is that full recovery is a couple years away – much faster than in the last housing downturn – and remote work will eventually work its changes on the housing market.”
North Texas median home sales prices were 5% higher through the first four months of 2020.
But a 17% year-over-year drop in April home sales all buy wiped out annual gains for the local housing market.
May’s home sales by real estate agents are expected to be down by an even larger percentage from 2019 levels because of the pandemic.