I had a call from consumer last week who wanted to talk about where the real estate market is headed, worried that we are in another housing bubble. Although we never really know how valid predictions may be until we look back on them, I posted earlier this year about the very same concern… interestingly inspired by another client talking about the same concerns. That post gave 6 reasons why that isn't likely, prefaced by Warren Buffet commenting that he feels those chances are slim right now. But if we aren't in a bubble, where are we headed?

Predictions for home prices over the next five years from a nationwide panel of over one hundred economists, real estate experts and investment and market strategists were  averaged by Pulsemonics for the 4th quarter 2016. Here are the results of this latest survey.

Home values will appreciate by 4.0% in 2017, 3.2% in 2018 and 3.0% the next three years… resulting in an annualized average appreciation of 3.24% over the next five years.

Home price expectation survey2016q4

As should be expected when over 100 experts are giving their opinions, some were bearish and some were bullish. While all averaged projections predicted a cumulative appreciation of 21.4% by 2021, bears projected 10.2%  and bulls 30.8%.

Home price expectation survey2016q4-2

I am no expert, but these feel like viable predictions to me… sustainable, not a bubble.

Charts from Keeping Current Matters

Sharlene Hensrud, RE/MAX Results – EmailMinneapolis – St. Paul Real Estate Market

HomesMSP Team- SharleneJohnAngela Minneapolis-St. Paul Realtors


About Sharlene Hensrud

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

Related Posts

Dual Agency…and other agency relationships in real estate transactions

Last week I talked about what it means to be represented by a buyer's agent..and about the fiduciary responsibilities involved in all agency relationships in real estate transactions. I promised to talk about the other forms of agency representation in real estate transactions in Minnesota this week. Buyers and sellers are sometimes hesitant to sign a representation.

Read More

Foreclosures…reading the fine print

I am seeing more and more 'fine print' in counter-proposals from  banks on foreclosed properties these days. In fact, I am on my way to an inspection on a foreclosure property soon…BEFORE my client signs the counter-proposal…precisely because of that. My client got the winning bid for the property and his offer was subject to inspection. In a.

Read More

9 things to not forget to do when you move

It doesn't matter if you are buying or selling, moving can be one of the most frazzling parts of the process. That said, moving into your new home ranks right up there in exciting life experiences! It's easy to get so caught up in moving your 'stuff' that you forget some other important tasks that.

Read More