Housing experts offer ideas on the new normal in wake of downturn
DENVER -- What’s considered normal in light of the housing downturn? Home price appreciation of 3% to 5%, 1.6 million household formations a year, and a 65% homeownership rate, according to three economists who offered their housing outlooks Friday at the annual National Assn. of Real Estate Editors conference.
Major take-away: “The bottom will be as equally dramatic as the recession has been,” said Stan Humphries, Zillow’s chief economist. Housing sales and price changes will vary considerably by geographic market and within those markets. Los Angeles will see a 0.9% uptick from March 2012 to March 2013. Zillow forecasts Chicago will see a 3.8% drop in that same period.
Major eye-opener: When National Assn. of Realtors economist Lawrence Yun offered his opinion that there could be 10% home price appreciation nationally next year as we emerge from a three-year market bottom. He retracted that in the question-and-answer session. The official NAR prediction is in the 3% to 5% range.
Major disagreement: Another Yun prediction is a 70% to 80% growth in housing starts. David Crowe, the chief economist of the National Assn. of Home Builders, begged to differ. “Plants have been mothballed,” he said. “It will take a lot of time and money before we can come back.”
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