House Prices: When Will 2006 Values Return?

2006by The KCM Crew on February 11, 2013

There is a lot of optimism regarding house prices. The most recent Home Price Expectation Survey projects a 3% -3.5% increase in values for each of the next 5 years. We concur that most parts of the country will see varying levels of appreciation over that time. However, we must realize that we will not see 2006 values any time soon.

Barclays’ U.S. residential credit strategy team recently predicted that 2006 values would return in 2021. From an article in DSNews:

“While the floor appears to have materialized, they stress that home prices are likely to recover slowly over the next 4 to 5 years.

“We expect on average a 3-4 percent annual increase in home prices [nationally] in coming years,” they said in an updated market outlook.

At that rate, Barclays’ analysts explained, home prices will be slightly below their 2006 peaks even in 2020, finally returning to pre-crisis peak levels in June 2021.

In an article for CNNMoney, the analytics firm Fiserv projected that 2006 prices would not return until 2023:

“Fiserv forecasts prices will bounce back an average of 3.7% a year for the next five years — a rate that would still leave prices 20% below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.”

If you are waiting for 2006 values to return before selling your house, realize it will take years.

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About Karen Shattuck

I have been a Full Time Realtor and Top Producer with NCMAR since 1997. I represent Seller and Buyer Clients in regard to Residential Real Estate. I am currently a Sales Associate with EXIT New Options Real Estate located at 100 Erdman Way in Leominster, Massachusetts, 01453. I have 3 children who have all graduated from Lunenburg High School and I have lived in Lunenburg since 2001. Prior to my move to Lunenburg, my family lived in Leominster for 10 years. I grew up in Fitchburg and attended the University of New Hampshire.
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