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Future Home Prices

We have seen a massive drop in home prices. We consulted the experts to create an accurate calculator that would predict future home prices. After studying the issue extensively, we figured a way to get a good future home price estimate using only two variables: (1) zip code and (2) current home price. We did a regression analysis against old data and achieved accurate predictions in our model.

Generally, we think there will not be a home bottom in most markets until 2011 or 2012. Even when home prices stop falling, they will likely remain somewhat stagnant in most areas for a year or two.

Future Home Price Estimate

Over the longer term, say the next 10 to 20 years, most economists expect prices will increase again. Although, virtually every person we talked to conceded that we probably will never see the meteoric rise of house prices like we did in the past decade.

Most experts agreed that given even conservative estimates, home ownership should be a safe, easy way for conservative families to increase their wealth over time. The general consensus was that home prices will increase on average at about 3% per year (coincidentally, this is about the same estimate as for per capita income).

Expected Appreciation

The most cautious experts cautioned that it is a decidedly bad idea to count on your home increasing in value at all. People should regard their own homes as "a place to live" rather than as an investments. There will always be risk, even given the tax benefit provided by home ownership.

Optimistic About Future Real Estate Prices polled thousands of home owners and found that 61% believed their home price would either remain level or rise over the next six months. In another study, Realogy Corp. discovered that 91% of participants considered owning a home as the best long-term investment possible. Finally, Citigroup conducted an online survey of over 5,000 people and found that just 32% thought stockes were a "good" investment, but 51% thought it was a "good" time to buy a home.

Future Home Price Calculator

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