By Samantha Sharf | Forbes
In each of the six months from December through May, the most recent month for which data is available, national homes prices set new highs. Home price growth has outpaced wage growth and inflation. So perhaps it is not too surprising that a new survey has found that more than half of homeowners expect home prices to decline in the not too distant future. Of 1,079 adults surveyed by ValueInsured, a provider of down payment protection, 58% agreed with the notion there will be a “housing bubble and price correction” in the next two years. That’s up from 46% last quarter. Meanwhile, 83% of respondents believe it’s a good time to sell.
Over the past five decades home price cycles have tended to last seven to ten years. The last up-cycle was an exception, running 17 years before home prices crashed spectacularly in 2006 and finally began a sustained rebound in 2012. “Historical precedence is now on the side of those who think a housing market correction is near,” says Ralph McLaughlin, chief economist at home search site Trulia. It is possible, he notes, that the new norm is closer to 17 years.
