Housing experts have predicted it will take three to five more years for the market to get back to normal, according to the new Zillow Home Price Expectations Survey.
When it does, however, home prices will soar beyond their pre-recession peak, the survey of 107 economists, real estate experts, and investment and market strategists revealed.
The experts forecast that median home values will rise 4.8 percent in 2014 to $176,760, increase another 3.7 percent in 2015, and return to their 2007 peak by 2018.
This prediction for continued slow growth of the housing market is no surprise, given two demographic realities: First, financially strapped young adults are holding the market back as they delay home purchases due to a lack of savings for down payments, a collective decision to put off marriage and children, a record-high levels of student debt. Second, older homeowners are hanging onto their family homes for longer—perhaps holding out for better selling prices—which means they’re not in the market to buy smaller, replacement homes.
Those two conditions will change with time, Zillow Chief Economist Stan Humphries noted. “We’ve reached a point in the recovery where the only real cure-all is time.”