Most national forecasts are predicting a 3% to 4% appreciation rate for 2016, which has to be a safe bet. If it comes in anywhere from -2% to +8%, you can say that you were close.
Zillow has enough algorithms that they are willing to make predictions for each local area. They have conflicting numbers, depending on where you look on their website – these are from the Home Values section:
You can see that Zillow was less optimistic last year too. Most were predicting that mortgage rates would be in the mid-4s by now, so the lower rates in 2015 helped fuel higher-than-expected prices. Could rates stay right where they are? Maybe, but both Zillow and I think the euphoria will die down next year:
Zillow Price-Appreciation Predictions
For some reason, Zillow is also labeling each market from Warm to Very Cold. The labels don’t seem to correspond to the predictions, so I don’t know their intent – are they just trying to tell you to put on a sweater?
How will buyers feel about getting worked over for that last 2% to 3% when they see they are in a ‘Very Cold’ market?
Bill’s forecast on inventory:
No specific numbers predicted here, just low supply putting pressure on prices:
I started seeing that “cold” to “very cold” popping up on Zillow as far back as the summer. It was odd since everything seemingly was flying off the shelf. Hard to reconcile 92130 and 92075 as being “cold” since it seems difficult to get 92130 for under $400 a foot and eastside 92075 seems to have settled in at $450-550+ a foot. Maybe its cold due to the altitude….