SEATTLE, Aug. 16, 2017 /PRNewswire/ -- There is a 73
percent chance the next U.S. recession will begin by the end of
2020, according to a panel of experts surveyed for the 2017 Q3
Zillow Home Price Expectations Surveyi. But the experts
don't anticipate the housing market would play as big a role as in
past recessions. Instead, they anticipate a geopolitical crisis
could trigger the next recession.
The quarterly survey, sponsored by Zillow® and conducted by
Pulsenomics LLC, asked more than 100 real estate experts and
economists about the next national recession, its causes, and the
potential effects on the housing market.
The panelists expect a future recession to have a moderate
impact on the U.S. housing market overall, but some markets are
more at risk than others. More than 60 percent of experts say the
next recession will have a major impact on the San Francisco and Miami housing markets, and at least half
predict a major impact in Los
Angeles and New York as
well.
"That experts believe geopolitical crisis is the most likely
next trigger for the next recession is a sign of the times we're
living in," said Zillow Chief Economist Dr. Svenja Gudell. "Historically, geopolitical
events rarely cause a sustained recession, and other contributing
factors, such as oil price shocks, play a more predominant role.
We've enjoyed eight years of sustained growth following the last
recession, but the housing market is still recovering in many ways.
The housing market is not expected to cause the next recession, but
some major markets could see some collateral damage."
Unsustainable home price increases and lax lending standards led
to a significant decline in the housing market 10 years ago,
kicking off the last recession. Nationally, homes lost 23 percent
of their value, and more than 50 percent in the hardest hit metros.
This crash led to a widespread economic recession, with high
unemployment rates and slow wage growth.
The Great Recession is still being felt after several years of
recovery. Even as some housing markets set record highs, home
values in 55 percent of U.S. markets are below the peak values set
during the bubble years, and five million homeowners are still
underwater on their mortgages. Wage increases have only recently
picked up after several years of relatively stagnant
growthii.
Despite the expected impact on the housing market, the survey
respondents expect home values to continue to appreciate at a
healthy pace. The current expectation is for home values to rise
5.1 percent in 2017, up from 4.4 percent earlier this year.
"Stronger short-term expectations for U.S. home prices are a
sign of the persistent inventory challenges facing first-time and
move-up homebuyers, but experts' long-term predictions suggest that
buyers will have more bargaining power in the years ahead," said
Pulsenomics Founder Terry Loebs.
"Incomes growing faster than home values is a promising sign for
renters hoping to become homeowners, but they should still tread
carefully in markets that have seen sharp price increases in recent
years."
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. 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.
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 114 experts between July
24-August 7, 2017. The survey was conducted by Pulsenomics
LLC on behalf of Zillow, Inc. and asked the experts about their
expectations for the housing market.
ii
https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/2017-economic-commentaries/ec-201704-wage-growth-after-great-recession.aspx
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SOURCE Zillow