It was only a month or so ago that Zillow and Pulsenomics released their fourth quarter Home Price Expectations Survey but now they’ve already released their first quarter 2023 survey about a week ago and they cut their home price forecast yet again.
The graph below shows their latest forecast and it now starts with 2022 as the baseline. If the previous forecast had started at 2022 it would have shown cumulative appreciation of 13.0% through 2027. As you can now see in the graph below that has been trimmed to 11.6% with a 2.0% decline in 2023. The previous forecast had a 1.6% decline for this year. So these folks are clearly more pessimistic now.
Chicago Area Home Price Forecast
This survey release was a bit unique in that, for the first time, Pulsenomics asked their real estate experts what the outlook for home prices was in each of the 20 metro areas covered by the Case Shiller home price index for 2023. So we actually have their short term outlook for Chicago below.
Most of the experts expect Chicago’s housing market to bottom in 2023 with the average forecast calling for a 1.2% decline in home prices. Note that that’s ever so slightly better than their forecast for the nation as a whole.
We can still get a longer term forecast for Chicago home prices by looking at the Case Shiller futures prices. Once again John Dolan, the market maker for the Case Shiller home price futures, is the guy that provided me with the data for Chicago. His graph is below and it implies a 3.1% decline for 2023 and it projects a cumulative appreciation of only 1.3% through the end of 2026. In fact, it has Chicago home prices below their July peak during the entire timeframe. Now that’s certainly a gloomier picture than the Pulsenomics outlook for the entire nation.