Positive signs spark upwardly revised predictionsMarch 14, 2013 @ 8:47 am
Several economists have recently revised their predictions on housing values to reflect a stronger-than-expected real estate rebound.
Paul Diggle, Capital Economics' economist, upwardly revised his home price forecast from a 5 percent projection to an 8 percent rise in home prices this year.
"Prices of both new and existing homes are picking up, the latter by over 10 percent year-on-year," Diggle wrote. "Indeed, after a couple of years during which new house prices outperformed, primarily owing to builders constructing more homes for the higher-end market, we now expect existing house prices to close the gap. As more consumers are able to access mortgage credit, home builders should widen their offering, while continued investment demand will bid up existing house prices."
Ivy Zelman, an independent real estate analyst, told CNBC last week that "we're in a nirvana for housing. I'm the most bullish I've ever been." Zelman said that home prices could rise for another four to six years.
Economists at Bank of America revised their home price forecast from 4.7 percent this year to 8 percent.
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