SEATTLE, Dec. 9, 2015 /PRNewswire/ -- A third of the
experts surveyed in the latest Zillow® Home Price Expectations
Survey said the San Francisco
housing market is in a bubble, and another 20 percent believe the
market is at-risk for bubble conditions within the next year.
The survey, sponsored quarterly by Zillow and conducted by
Pulsenomics LLCi, asked more than 100 panelists about
their expectations for the housing market. Of those, 66 answered a
question about bubble conditions in 20 local housing markets.
The survey responses revealed that some housing experts are
concerned about over-valuation in some of the nation's hottest
housing markets – and that there is significant disagreement among
experts about whether the rapid home-value growth in those markets
puts consumers at risk.
"A handful of markets – especially the Bay Area – are very hot
right now, and it's possible home values may actually begin to fall
somewhat in these places as more residents are priced out amidst
rising affordability concerns, especially when interest rates
rise," said Zillow Chief Economist Dr. Svenja Gudell. "Whether those local conditions
constitute a 'bubble' is up for debate, even among economists.
Without 20/20 hindsight, it's difficult to identify bubbles as
they're happening, but it is very clear that nationally we are not
seeing a return of the conditions that caused the last national
bubble. Tighter lending restrictions today mean we aren't seeing
buyers get loans they realistically can't pay back, like we did in
years past. It's significant that some experts are starting to
worry about bubble conditions, but in my opinion, there's no real
danger of a severe crash like the one we all remember from the last
decade."
Some experts said they think bubble conditions are already
present in Miami, Los Angeles, Houston, San
Diego, and Seattle. A
quarter of respondents said they think there is significant risk of
a housing bubble in the next three years in Boston. (The same number of panelists said
there is no risk of a bubble in Boston in the next five years).
The bubble fears are coming to the surface even as home values
overall are expected to gradually level off over the next several
years. The ZHPE panel projects an annual growth rate of 3.9 percent
through the end of 2015 – a gradual slowing of the U.S. housing
market. Over the next five years, among all 108 panel respondents,
the expected average annual home-value appreciation rate is now
just over three percent. This scenario would result in a national
median home value of more than $215,000 by the end of 2020.
"The long-term outlook for U.S. home values has diminished to a
three-year low, and a clear-cut consensus among the experts remains
elusive, even at the national level," said Pulsenomics Founder
Terry Loebs. "Based on the
projections of the most optimistic forecasters, home values
nationally will increase 4.7 percent next year and surpass their
May 2007 peak levels in April 2017. In contrast, the data collected from
the panel's most pessimistic respondents expect only 2.3 percent
appreciation for next year, and even more subdued appreciation
thereafter – a path that would delay the market's eclipse of the
bubble peak until September 2019. The
divergence of expert views regarding the existence of regional
price bubbles and the path of future home values is a reminder that
the U.S. housing sector has yet to fully heal more than eight years
after the epic bust, and that significant risks have re-emerged
within certain large metropolitan area housing markets."
Housing
Market
|
Already in a
bubbleii
|
Significant
risk
next 12 months
|
Significant
risk
next 3-5 years
|
No significant
risk
next 5 years
|
Atlanta
|
1
|
1
|
8
|
28
|
Baltimore
|
1
|
0
|
5
|
30
|
Boston
|
1
|
3
|
21
|
14
|
Chicago
|
1
|
0
|
7
|
28
|
Dallas
|
3
|
6
|
10
|
20
|
Detroit
|
1
|
0
|
2
|
31
|
Houston
|
8
|
0
|
4
|
22
|
Los
Angeles
|
6
|
6
|
16
|
12
|
Miami
|
4
|
6
|
19
|
13
|
Minneapolis
|
1
|
0
|
2
|
30
|
New York
|
10
|
5
|
13
|
15
|
Philadelphia
|
1
|
1
|
6
|
26
|
Phoenix
|
1
|
1
|
14
|
20
|
Riverside
|
1
|
0
|
10
|
20
|
St. Louis
|
1
|
0
|
1
|
34
|
San Diego
|
5
|
6
|
11
|
13
|
San
Francisco
|
22
|
11
|
15
|
8
|
Seattle
|
6
|
2
|
13
|
13
|
Tampa
|
1
|
0
|
6
|
25
|
Washington,
DC
|
2
|
3
|
10
|
18
|
About Zillow
Zillow® is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Zillow also sponsors the
bi-annual Zillow Housing Confidence Index (ZHCI) which measures
consumer confidence in local housing markets, both currently and
over time. Launched in 2006, Zillow is owned and operated by Zillow
Group (NASDAQ: Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
About Pulsenomics:
Pulsenomics LLC (www.pulsenomics.com) is an independent research
and consulting firm that specializes in data analytics, new product
and index development for institutional clients in the financial
and real estate arenas. Pulsenomics also designs and manages expert
surveys and consumer polls to identify trends and expectations that
are relevant to effective business management and monitoring
economic health. Pulsenomics LLC is the author of The Home Price
Expectations Survey™, The U.S. Housing Confidence Survey, and The
U.S. Housing Confidence Index. Pulsenomics®, The Housing
Confidence Index™, and The Housing Confidence Survey™ are
trademarks of Pulsenomics LLC.
i This edition of the Zillow Home Price Expectations
Survey surveyed 108 experts between November
5th and November 23rd, 2015. The survey was
conducted by Pulsenomics LLC on behalf of Zillow, Inc.
ii Number of housing experts out of 66 who responded
in the affirmative to the question.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/san-francisco-la-boston-top-experts-list-of-potential-bubble-markets-300190291.html
SOURCE Zillow