11.19.14 by Jeff Johnson
A recent survey of 100 real estate experts and economists by the real estate data website Zillow found that 40% of them believe that a more normal housing market is still three to five years away, based on current home price trends and home buyer activity. A third of respondents were more optimistic, stating they believed the market will stabilize in the next one to two years and a smaller group (20%) believed the housing market has already returned to normal or will within the next 12 months.
Low rates of new household formation were considered to be the main factor holding up the housing recovery and the slow pace was attributed to the lackluster speed of economic recovery.
Delays in making lifestyle changes at both ends of the adult spectrum were also highlighted in the Zillow report. The perception is that “millennials” are holding off on making major commitments, including marriage, parenthood and home ownership, while “baby boomers” nearing retirement age are opting to stay in their current homes longer thereby limiting the nation’s inventory of available homes.
“We’ve reached a point in the recovery where the only real cure-all is time,” Zillow Chief Economist Dr. Stan Humphries said. “The landscape is slowly changing, as incomes begin to grow, negative equity fades and new households start to form. These shifts won’t occur overnight, but they are happening. Patience will be a virtue over the next few years as we wait for these traditional fundamentals to more fully take hold in the market.”
Inspired by — Zillow.com