For the next 5 years, house values will increase sustainably more than 4 percent a year, Zillow Home Price Expectations Survey (ZHPES) reveals.
According to the survey, this is contingent upon the growth rates exceeding home value growth rates in the 12 years preceding the onset of the housing bubble that culminated in the Great Recession.
In any case, it seems like good days are coming in the residential real estate market.
With its panel of more than 100 professional forecasters, Zillow foresee the 4.1 percent next-five-year annual home value appreciation rate exceeding the pre-housing bubble's (1987-1999) average annual appreciation rate of 3.6 percent.
This is the first time the predicted average annual growth rate for the next five years has surpassed pre-bubble levels since the survey's inception by Zillow three years ago.
However, be extra careful won’t hurt.
"That said, their expectations are a bit shy of the home value gains of 5.5 percent that we saw in 2012, implying some moderation in the pace of gains. The panel expectations are consistent with continued strong home value growth this year fueled by tighter-than-normal inventory of for-sale homes and robust demand attributable to high affordability and a stronger general economy," said Zillow Chief Economist Dr. Stan Humphries.
There are plenty of factors that could undermine the emergence of the home values. Bring homes to market from sellers and banks' "shadow inventory," raise mortgage interest rates, push home values too high, trip up the economy and all bets are off.
Besides, a barrage of study in the past have pointed to real recovery, but anemic economic growth, creeping employment and salary gains and still tight mortgage lending came along and put a crimp in the forecasts.
