Economists Forecasting Home Prices to Rise 12% in the Next 5yrs
Posted by Ted C. Jones on May 19, 2010
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Economists Forecasting Home Prices to Rise 12 Percent in the Next Five Years (But In My Opinion, That Would Not Even Cover Inflation) Wall Street Journal Article
Economists in this survey are forecasting a 12 percent price recovery in the next five years. If that is the case, then prices at the end of 2014 would be approximately $193,400—or back to the level last seen in 2004. I have long said that the last time we had the normal number of sales was 2002, and with a price lag of two years, that would make 2004 as the last normal price year. (This all, however, ignores inflation, and since housing typically outperforms inflation, then this price level would still be less than expected.
See my post “Light at the End of the Tunnel for Housing…” for home price performance and inflation. As you can see, I wrote on March 24th of this year that we would have expected a $193,500 median price in 2009 as normal (two months ahead of the pack of economists).
The table below lists median U.S. Existing Home Prices since 1990.
| Year | Median Price |
|---|---|
| 90 | $96,400 |
| 91 | $101,400 |
| 92 | $104,000 |
| 93 | $107,200 |
| 94 | $111,300 |
| 95 | $114,600 |
| 96 | $119,900 |
| 97 | $126,000 |
| 98 | $132,800 |
| 99 | $138,000 |
| ’00 | $143,600 |
| ’01 | $153,100 |
| ’02 | $165,000 |
| ’03 | $178,800 |
| ’04 | $195,400 |
| 05 | $219,600 |
| 06 | $221,900 |
| 07 | $219,000 |
| 08 | $198,100 |
| 09p | $172,700 |
