Home builders and industry experts spoke last week at the annual National Association of Real Estate Editors conference held June 13-16 in Las Vegas, saying that they expect housing prices to level off by 2020.
Jeff Collins for the Orange County Register reports the experts say we aren't in a bubble.
“Our view is there is going to be a slowdown and not really a recession,” said Revathi Greenwood, head of research for commercial brokerage Cushman and Wakefield. About half the economists responding to surveys expect a recession by 2020, and 30 percent expect one to hit in 2021 or later, said Frank Nothaft, chief economist of CoreLogic, an Irvine-based real estate data firm.
Homebuilding is projected to rise over the next two years but not enough to meet demand. That’s going to push home prices up even more, at least in the near term, forecasters said.
The low number of existing U.S. homes for sale should be good for home builders, said Robert Dietz, chief economist for the National Association of Home Builders. But builders haven’t been able to increase their supply either, exacerbating the nation’s “inventory” shortage. Challenges facing builders include rising lumber prices and a labor shortage. Builders also struggle with development fees and getting local approvals to start construction. Despite that, homebuilder confidence is at a two-decade high because of strong demand, Dietz said. “The homebuilding market will grow, but not as fast as needed due to supply-side conditions,” he said.
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