By Steve Cook, Rismedia
Bank of America’s announcement recently that it has significantly improved its home price forecast for the current year made headlines; in fact, the bank joins a growing list of housing economists who have seen the light and hopped on the recovery bandwagon.
Bank of America improved its price forecast for the year from a .5 percent increase over 2011 to a 2 percent increase, citing shrinking inventory and a shift toward short sales.
Perhaps the biggest about face on prices came from Zillow’s Chief Economist Stan Humphries, who said in February that home values, as measured by the popular site’s automated valuation mode, would fall 3.7 percent compared to 4.7 percent last year, and he didn’t forecast a national bottom for housing prices until 2013. In late July, Humphries greatly revised his opinion, stating: “The housing market has finally turned a corner. In Q2, we saw continued momentum in the housing recovery, despite of some economic turmoil, like flagging job growth numbers and sovereign debt issues in Europe. Nationally we hit a bottom in the first quarter of the year, and the Zillow Home Value Forecast shows that 67 of the 156 markets it covers will experience an increase in home values over the next 12 months. Nationally, Zillow forecasts home values will rise 1.1 percent.” That’s a net change of 4.8 percent in six months.