Zillow: No housing bottom before 2013

Home prices won't fall as fast this year as they did in 2011, and some cities will do much better than the national average, company predicts.

By Teresa at MSN Real Estate Feb 9, 2012 1:35PM

© Stockbyte/Getty ImagesZillow has taken out its crystal ball and made some predictions on where the housing market will go this year.

 

The real-estate company sees home values continuing to fall in 2012, but not as much as they did in 2011. Overall, Zillow predicts a national decline of 3.7% this year, compared with 4.7% last year.

 

It forecasts that we won't see a national bottom for housing prices until 2013.

 

Post continues below

 

But the trend won't be the same in all areas. Of the 25 largest metropolitan areas Zillow tracks, 14 will perform better than the national average and 11 will do worse, it predicts.

The new Zillow Home Value Forecast makes its predictions not by using a crystal ball but by analyzing data from past home-value trends and current data such as home sales, housing inventory and unemployment.

Small increases in home values are predicted in five markets during 2012:

  • Washington, D.C., 1.3%.
  • Los Angeles, 1.2%.
  • Phoenix, 0.6%
  • Riverside, Calif., 0.3%.
  • Baltimore, 0.1%

Miami-Fort Lauderdale is expected to remain stable, with Pittsburgh, San Francisco, San Diego and Dallas-Fort Worth expected to show price declines of less than 1%.

 

The greatest decreases in home values are predicted in:

  • Atlanta, 8.5%.
  • Chicago, 7.6%.
  • Seattle, 6.9%.
  • Cleveland, 5.5%.
  • Sacramento, Calif., 5.5%.

"While we forecast only two markets to end the year higher than they started, most will see better trends over the course of the year," wrote Stan Humphries, Zillow's chief economist. "Negative equity will continue to cast a long shadow over the real-estate market, keeping foreclosure rates elevated and keeping a firm lid on significant home-value growth even once values have bottomed in 2013." 

 
12Comments
Jan 1, 2013 11:58PM
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For the 2013 real estate outlook, one should see the 12-23-12 post at:
http://www.brokerforyou.com/
Nov 30, 2012 5:54PM
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So many of these real estate articles are written from a sellers perspective.  Washington DC will not see a favorable sellers market in the future with the looming budgets cuts.  The first to go will be the gov't contractors.  If you want to sell, do it sooner rather than later.  If your looking to buy, you'd be advised to wait until the end of 2013 when the market will be becoming a buyers market with the coming foreclosures of homes that no longer have incomes.
Feb 18, 2012 10:40PM
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So should I sell my place for a loss or refinance and wait it out?
Feb 18, 2012 2:41PM
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suzy williams your so silly. the gop isnt in control. you'll know when there in control when the economy starts to come around. maybe you've noticed some of the smaller things in state governments that are coming around turn  like balanced budgets and school districts turn off ed  schultz and and listen to what the other side is saying not what the liberal media tells you there saying. you'll be surprised to learn that what ed the red is saying and what the gop are saying are two totally different things
Feb 18, 2012 1:23PM
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Finally, the media have learned to exercise more caution in their proclamations that the housing market is improving.  The first video I saw above talked about needing another quarter of data to get a handle on where the housing market is really headed.  In reality, though, even more data than that are needed.  Two good quarters don't guarantee a true bottom, or even the start of one.  What's interesting is what the article starts out with:

The real-estate company [Zillow] sees home values continuing to fall in 2012, but [just] not as much as they did in 2011. 
And right after that sentence is:
Overall, Zillow predicts a national decline of 3.7% this year, compared with 4.7% last year.
And right after that sentence is:
It forecasts that we won't see a national bottom for housing prices until 2013
It's amazing how forecasts get revised as soon as they are proven to be inaccurate.  At the end of 2012, don't be surprised if the new bottom is scheduled for 2014.  And at the end of 2013, don't be surprised if the new bottom is set for 2015!  According to some "experts", 2011 was supposed to be the magic year when the housing market hit bottom.  Those predictions were made back in 2009, and seem laughable now.  It would be nice if websites would post their prior prognostications right along with their current predictions, so readers could see how wrong they were in the past and have more rational expectations about just how valuable their current crystal-ball gazings are apt to be.

And speaking of crystal balls, don't you just love the picture of the crystal ball at the beginning of the article?!  That says all that needs to be said about this article's foretellings.  But, hey, they do deserve credit for their honesty in conveying just how difficult it is for anyone to predict the future.

Perhaps, the best predictor of all for when the housing market will hit bottom will be when housing prices are at the levels they would have been at, if big government and the Federal Reserve had never tampered with the housing market and encouraged lenders to get everyone under the sun into a house.
Feb 18, 2012 12:36PM
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Cleveland Ohio is already a disaster, and they had very little appreciation since 2000 if any, but they have been destroyed by this.  I bought there(aurora) in 2000 and lost $100k in 2010 and the foreclosure rate in Barrington Estates there is at least 30%, all 500k plus, homes. another 5.5% will be unreal.
Feb 18, 2012 10:24AM
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I wasn't aware that the GOP was in "power" as Suzy puts it.  The last time I checked the Democratic party controlled the Senate and the White House, giving them 2/3 rds of the "Power".  The GOP only has the House, and cant get anything accomplished while the Dems. hold sway in the other two.  Get your facts straight lady.  A prime example is the length of time its been since we have had a budget passed.  Since the Obama era began, they haven't had a budget in the U.S. Government.   This way there has been no control on how much they spend.
Feb 18, 2012 8:48AM
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suzie, i concour with you, power to the people. see how they handled the birth control issue
Feb 18, 2012 8:33AM
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The Govt (Taxpayer) should not be in the housing business. It will turn into the next boondoggle with only the "responsible" holding the bag.

 

Time to stop paying the mortgage & let good ol' Uncle start paying.

Feb 18, 2012 6:15AM
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Congress will not be working for the people until (1) we overturn the Citizens United decision and (2) we put more Democrats into the legislature. The GOP needs a good 4-year spanking (out of power) to teach it to do the people's work, not the work of the One Percent.
Feb 18, 2012 4:59AM
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How much worse can it get? These forcasts are dire. I hope things get better now that congress has decided to work for the people again? I want to purchase a home soon, things have to get better.
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