Home price outlook turns negative for first time since 2012: Zillow
The impacts of the coronavirus took a toll on the housing market, hampering sales and prices during the most popular time of year to buy a home.
As the effects of the pandemic ripple through the country, economists and real estate experts predict home prices will fall in 2020, according to Zillow's Home Price Expectations Survey of 106 economists and real estate experts conducted by Pulsenomics.
By October 2020, they expect that home prices will have dropped by 1.8%, with prices returning to 4Q 2019 levels in the third quarter of 2021.
They forecast an overall home price decline of 0.3% throughout the rest of 2020 — a swing from a 3.3% growth expectation in the first quarter's survey.
"This is the first time since 2012 that the panel-wide price outlook has turned negative, and the quarter-to-quarter swing in expectations is the largest we've seen in more than a decade," Terry Loebs, founder of Pulsenomics, said in a press release. "Longer term, the outlook for home values nationwide is mixed — price projections for 2022 and beyond actually inched higher from levels recorded prior to the COVID-19 outbreak."
Coronavirus and related social-distancing orders stifled this year's spring home-buying season. However, historically low interest rates and swells of refinances helped keep mortgage volume afloat. The experts split on when those lost sales would be made up. A tenth said transactions would merely shift to later this year. About 22% expect home sales to double-up in spring of 2021, while 55% believe it will spread across multiple years.
"Experts' forecasts on the future of housing vary widely at this early stage of the recovery," said Skylar Olsen, Zillow's senior principal economist. "Our forecast has become more optimistic as we ingest new data and watch pending sales pick up faster than expected. What does seem more consistent in this wisdom of crowds is that full recovery is a couple years away — much faster than in the last housing downturn — and remote work will eventually work its changes on the housing market."