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.
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%.
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 – Email – Minneapolis – St. Paul Real Estate Market
HomesMSP Team- Sharlene, John, Angela – Minneapolis-St. Paul Realtors
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