Home prices have been on the rise since down-falling, but the coming years are expected to see cooling off trends. According to the fourth quarter Zillow Home Price Expectations survey, which asked more than 100 economists and real estate experts about national and local trends, there are varying ideas of where the market is headed and whether or not a bubble is around the corner.
Home value growth around 3 percent is in-line with historic, pre-bubble norms for the nation. But some experts believe home values to rise 4.7 percent in the next year and surpass the May 2007 peak by April 2017.
On average, housing experts reported:
- The median home value at the end of 2015 to be up 3.9 percent annually.
- Annual growth rate is anticipated to fall by 3.4 percent and to rates hovering above 3 percent annually through 2020.
- The most pessimistic housing experts believe home prices to rise 2.3 percent in 2016.
According most respondents, the San Francisco region, comprising the five-county metro, is either already in a bubble or headed straight into one. Twenty-two respondents said the metro was already in a bubble and 11 others said a bubble is to be expected in the next 12 months.
St. Louis, Minneapolis, Detroit and Baltimore were all the top ranking metros not expected to see a bubble within the next five years.
In Chicago, only one respondent said the market is currently in a bubble, and no respondents believe the market is going to go through a bubble in the next year. Five experts said the metro could see a bubble in the next three years, and 28 said there is no risk for a bubble within the next five years.