Real Estate Experts Warn Home Prices Are About to Slow

May 23, 2018, 4:19 PM UTC

Housing prices have recovered nicely from the bubble that was such a key factor in the last recession, but the speed of that recovery could be slowing down soon.

Zillow and research firm Pulsenomics surveyed more than 100 real estate experts and economists about the state of the housing market. More than half say they expect monetary policy decisions to result in a recession by 2020.

The good news is they don’t expect the market to implode like it did ten years ago, even as the real estate industry records some ludicrously high sales and areas like Seattle hit record prices. However, an economic downturn will negatively impact the pace of growth in home prices over the next five years.

“The spillover to the housing market will depend on the depth, length, and severity of the next recession and, if some parts of the country feel the impact worse than others, some localized regional housing markets could see deeper effects,” said Aaron Terrazas, Zillow senior economist.

In the short term, though, prices are likely to rise at a steady pace. Zillow predicts the average home value will increase by 5.5% this year. And select areas of the country are likely to see much larger gains.