Unfortunately, that may not be the case according to one well-regarded economic study.

“The survey data we collected this year have consistently pointed to price stability in the intermediate- to long-term, which is reassuring in light of the volatility in actual home prices we have witnessed during the past few years,” says Terry Loebs, managing director with MacroMarkets. “However, most experts foresee a longer road to recovery, and materially lower price performance in the coming years than they did just a few months ago.”

Loebs added that “one can infer from the December data that the aggregate value of U.S. single-family homes four years from now will be roughly $1 trillion less than projected in May. Weak market fundamentals persist and continue to gnaw at wealth and confidence in these uncharted, post-bubble waters.”

A survey of economists, real estate experts, investment and market strategists by MacroMarkets found that on average they expect market values to fall .17% nationwide in 2011. The survey is based upon the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the coming five years.

The good news — if predictions are correct — is that the panel also felt that home prices would start rising in 2012 (1.94%) and would continue to increase in 2013 (2.86%), 2014 (3.45%), and 2015 (3.67%).

Real Estate As a Localized Commodity

The view here — from someone who is NOT an economist, real estate expert, investment strategist, market guru, soothsayer or seer — is different.

First, national real estate averages are interesting but often not relevant to local buyers and sellers because individual markets do not necessarily follow national trends.

As an example, the National Association of Realtors says in the third quarter that 30 out of 155 metropolitan statistical areas had higher annual price increases.

Or, just look at foreclosure patterns. Ten states, according to RealtyTrac, account for more than 70 percent of all foreclosures nationwide.

Second, there are local markets within metro areas with differing levels of real estate demand and supply — and thus differing pricing patterns.

Third, real estate is a nonhomgeneic commodity — a fancy term meaning that all properties are different. For any number of reasons — location, history, condition, size, zoning, etc. — a given property may be wildly in demand even in the midst of generally falling prices.

Fourth, all predictions are out the window if employment levels suddenly improve, unemployment levels quickly rise, or if mortgage rates remain which are now below 5% quickly move higher.

The bottom line: As a buyer you want to point to national predictions which forecast lower home values nationwide in 2011. As a seller if local price trends differ from national projections you want to say hey, let’s look at recent sales in this market, this neighborhood and with this type of property.

Real estate to lose another $1 trillion, say economists is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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In figures release yesterday, FHFA tells us that in the second quarter home values nationwide fell .07 percent when compared with the first quarter. This is good news in the sense that it could have been far worse given rising unemployment levels and increasing foreclosure rates.

In fact, the FHFA quarter-to-quarter numbers are fairly useless. The reason is that the first quarter is Winter, not exactly a robust selling season. The second quarter is the Spring and the start of summer, a period when demand heats up.

No less important, in the second quarter we have had the start of the government loan modification program, a program which has put more than 230,000 distressed borrowers into three-month loan workout trials. This means these owners are not facing foreclosure unless they fail the trial period — and, unfortunately, many will. In essence, these are delayed foreclosures.

Lastly, there are any number of state moratoriums preventing foreclosures in the short term and private-sector efforts to hold down foreclosure numbers that started in the first quarter and are keeping distressed homes off the market..

The real number from FHFA that counts is that home values in the second quarter fell 6.1 percent when compared with the second quarter of 2008. That’s again not a perfect comparison, but it’s much closer to reality than quarter-to-quarter numbers.

Real Estate: What Really Happened To Home Prices is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: FHFA, Foreclosures, home, moratoriums, prices, quarterly, real estate