SEATTLE, Aug. 28, 2018 /PRNewswire/ -- Home sellers
will continue to hold more negotiating power than buyers for the
next year and a half, according to the 2018 Q3 Zillow® Home Price
Expectations Surveyi.
The quarterly survey, sponsored by Zillow and conducted by
Pulsenomics LLC, asked more than 100 real estate economists and
experts for their predictions about the U.S. housing market,
including when they expect the market to favor homebuyers over
sellers.
Annual home-value appreciation has been faster in 2018 than it
was in 2017, and inventory has fallen on a year-over-year basis for
42 consecutive months. These conditions have put sellers in the
driver's seat for the past few years.
Recently, though, data suggest the balance may be starting to
tilt back toward buyers. Home-value growth is slowing in more than
half of the nation's 35 largest metros, and price cuts are becoming
more common. But even in those markets where appreciation has
slowed, it remains above its historic average rate and sellers
continue to have the upper hand, particularly at the most
affordable price points. Three out of four economists
surveyedii said the national housing market would not
shift to a buyers market until 2020 or later.
The largest share of respondents – 43 percent – believe the
national housing market will become a buyers market in 2020. At the
regional level, the panelists believe the Midwest will shift to a
buyers market a year before the rest of the country. The most
frequently selected year for the Midwest to start favoring buyers
over sellers was 2019, while the other regions (Northeast, South
and West) are expected to change in 2020 along with the nation
overall.
"For the past several years, home sellers held all the cards at
the negotiating table, fielding multiple offers while buyers faced
stiff competition and a fast-moving market," said Zillow Senior
Economist Aaron Terrazas.
"Conditions are starting to show signs of easing up, but the
effects of years of limited construction still linger. Inventory is
still falling on an annual basis, and home values are growing well
above their historic pace. Although these trends are starting to
lose their edge, it is far too soon to call it a buyers
market."
Home values across the country are expected to continue to see
strong appreciation in 2018, with a predicted 5.9 percent increase.
Although most panelists have made upward revisions to their
home-value growth projections from a year ago, the adjustments are
focused on the near-term, leaving the outlook beyond 2020 little
changed.
"While ongoing supply constraints are reinforcing the floor on
home prices right now, the experts' forecasts still imply the
joists will start to crack sometime next year, and result in
sub-three percent annual home-value appreciation in 2020 and
beyond," said Pulsenomics® Founder Terry
Loebs. Loebs also noted that another indicator from the
latest survey is consistent with a shifting market. "For the first
time, a majority of the experts said that there is downside risk to
their long-term outlook for home values nationally––and they
outnumber experts who assigned upside risk to their forecasts by
more than a three-to-one ratio."
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 great real estate professionals. In addition,
Zillow operates an industry-leading economics and analytics bureau
led by Zillow Group'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. Launched in 2006, Zillow is owned and operated by Zillow
Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
Pulsenomics
Pulsenomics LLC (www.pulsenomics.com) is an independent research
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 115 experts between August
1, 2018 and August 16, 2018.
The survey was conducted by Pulsenomics LLC on behalf of Zillow,
Inc.
ii 98 total responses
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SOURCE Zillow