More economists are forecasting future growth of housing prices in the next fews years… this time it’s the Chief Economist at Fiserv (a financial services technology firm) David Stiff who is predicting the bottoming of prices in late 2010 with an average climb in prices of 7.2% between late 2010 and early 2014.
Fiserv and Moody’s Economy.com worked together to forecast the upcoming housing market trends based on factors including income growth, demographic trends, unemployment rates, foreclosure rates, and construction costs. Of 384 places surveyed, the Bremerton-Silverdale area in Washington State had the highest four-year growth forecast, with prices expected to increase 44.7 percent from 2010 to 2014.
This analysis shows that Tacoma will have the second strongest market in Washington with a predicted growth rate of 33.1%, and Seattle close behind with a predicted growth of 25.5% by 2014.
I’ll fully admit, I’m skeptical of the full scope of these predictions. While I think it would be wonderful to see such strong growth in our area – I find the idea of 5-10% appreciation in our market to be fairly optimistic. Then again, we told our clients from 2001-2006 not to expect any more than 5-7% annual appreciation, and we were consistently wrong when they saw annual gains greater than 10%.
Here’s what I’ll take away from this article and others like it – the fundamentals of our market are much more healthy than they have been and are starting to strengthen again, and appreciation of prices and values can be expected in the next few years – though I would expect appreciation closer to 3-4% annually – which is still strong.