“poison ivyThat’s what housing bulls called it after analyst Ivy Zelman came out in 2005 and called it the top of the housing bubble.
when Toll Brothers CEO Bob Toll tried to say the housing market bottomed out in 2006. Zelman famously quipped “What Kool-Aid are you drinking because I want it?” Those who were were proven completely wrong.
Fast forward to 2022 and Zelman is once again sweating the housing bull.
Back in February, the founders of Zelman & Associates “peak” of the pandemic housing boom. She was rich again — just a few weeks later Soaring mortgage rates pressed US housing market slows downAs, this summer, Housing adjustments will intensifyZelman provided clients at her boutique home research firm with bearish assessments of U.S. home prices.
“So right now we’re getting a reversal of reorientation from free money to the current upswing. [mortgage] interest rates and inflation.Markets are therefore very important [price] Fix. And we’re already seeing signs of that in the past few months. ” As Zelman recently said on the Macro Hive Conversations podcast:“Inventories in certain markets, primarily the West Coast, Southwest and Mountain States, are increasing at Mach rates.”
Zelman’s forecast model predicts a 4% decline in U.S. house prices in 2023. And he predicts that in 2024, Zelman will see US home prices fall another 5%.
“as fast as possible [inventory levels] is increasing and demand is plummeting. [home] price correction. But it will vary by market,” he says Zelman. “I don’t think this is going to end anytime soon.
Zelman’s forecast is for US home prices to fall 8.8% between 2022 and 2024. Historically speaking, this makes him one of his three steepest house price declines ever recorded. The other two are the Great Depression and the Great Recession.
If Zelman’s prophecy is correct, luck branding pandemic housing boom— During a 43% surge in U.S. home prices in just over three years — until the pandemic housing bubble. That said, the expected drop is more like a housing correction than a housing crash, with industry saying a 20% price drop is needed. At least not to the level of the last crash. from peak to valley, US house prices It decreased by 27% between 2006 and 2012.
Admittedly, not everyone agrees with Zelman’s bearish outlook. over the next year Zillow expects US home prices to rise another 2.4%.. Goldman Sachs predicts US home prices are projected to rise 1.8% in 2023 and 3.5% in 2024. Meanwhile, companies like the Home Loan Bankers Association, core logic, fannie maeWhen freddie mac We expect home prices to jump into the low single digits in 2023.
But Zelman isn’t the only one with bears. from peak to valley, Moody’s Analytics predicts US home prices will fall between 0% and 5% nationwide. If a recession hits, that Moody’s forecast moves from 5% to 10% respectively. Falling home prices are also forecast by research firms such as John Burns Real Estate Consulting, Zonda, Capital Economics and Pantheon. Fitch Ratings believes home prices could fall between 10% and 15% If the housing slump gets even worse.
Moody’s Chief Economist Mark Zandy said: To tell luck Factors like “record low vacancy”, “very good underwriting” and “mediocre lending” alone are not enough to prevent single-digit home price declines. But this could prevent the US housing market from going into a full-blown “housing crash.” This time, Zandi says homeowners are in much better financial shape.
Note that when economists and analysts say “U.S. home prices,” they don’t mean your home. say. in the bubbling marketlike Austin and Boise, Zandi expects home prices to fall by 5% to 10%. 15% to 20% drop in housing markets in 187 heavily ‘overvalued’ neighborhoods in the country.
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