Categorized | Residential

Economists Lower Expectations of Home Value Increase in US

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Economists have lowered their expectations regarding the performance of the United States residential real estate market in 2012. Housing prices were initially expected to fall by just two tenths of a percentage point in 2012. However, economists have since grown more pessimistic about the market, and expect it to drop by as much as seven-tenths of a percentage point.

 

The survey also indicates that the anticipated growth of home prices in 2013 will not be nearly as strong as first thought. While home prices are expected to finally increase in 2013, they will likely only grow by just over one percent instead of the initially anticipated two percent.

 

One of the reasons for lower expectations is that the fourth quarter drop in home prices and sales was harsher than most expected. Analysts believe that the adjusted expectations are largely due in part to the fact that most simply do not know the exact point in time that the market will finally hit its bottom.

 

There is a great deal of variation in the expectations that economists have for the housing market in 2012. The variations are even greater for 2013. As an example, one highly regarded economist believes that housing prices will increase by as much as five percent this year. Another highly regard economist, however, believes that prices will fall by as much as eight percent.

 

Some economists are calling upon the federal government to start a bulk sales program with the hope that it will improve the overall housing market, though not everybody thinks that is the best solution to fix the current situation in the residential real estate market.

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About Josh Johnson

Josh is the main writer for the Residential category. He also helps out on other categories when needed, mainly the International section.

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