If projections hold out, home values will rise 22 percent cumulatively by the end of 2017, according to Zillow's first-quarter Home Price Expectations Survey.
For its report, Zillow and Pulsenomics surveyed a nationwide panel of 118 economists, real estate experts, and investment and market strategists to get their thoughts on future home values and housing market policies.
On average, the panel forecasts price growth of 4.6 percent in 2013 and 4.2 percent in 2014. More moderate growth is expected after that, with annual appreciation rates between 3.6 percent and 3.8 percent for 2015, 2016, and 2017, leading to an average 4.1 percent growth annually for the next five years.
According to Zillow, this is the first time the predicted average annual growth rate for the next five years has surpassed pre-bubble levels since the survey was created.
""The panel is quite bullish on home prices near-term, considering a pre-bubble average appreciation rate of 3.6 percent per year,"" said Dr. Stan Humphries, chief economist at Zillow. ""That said, their expectations are a bit shy of the home value gains of 5.5 percent that we saw in 2012, implying some moderation in the pace of gains.""
""The panel expectations are consistent with continued strong home value growth this year fueled by tighter-than-normal inventory of for-sale homes and robust demand attributable to high affordability and a stronger general economy,"" he added.
The most optimistic quartile of panelists predicted a 6.1 percent increase in home values this year, on average, while the most pessimistic predicted an average increase of 3 percent. Expectations for cumulative growth projections ranged from 34.2 percent among the most optimistic panelists to 11.7 percent among the most pessimistic, on average.
The panel also responded to questions on GSE wind-down and refinance options for underwater borrowers.
The majority of panelists--59 percent--said they believe a ""reasonable and appropriate"" timeframe for winding down Fannie Mae and Freddie Mac is within the next five years. Thirteen percent suggested a timeframe within the next two years, while on the opposite end of the spectrum, 10 percent said a period of more than 10 years is the most sensible.
In addition, the majority of panelists expressed support for proposals that would allow certain underwater borrowers to refinance; one such proposal is the Responsible Homeowner Refinancing Act of 2012, sponsored by Sens. Barbara Boxer (D-California) and Robert Menendez (D-New Jersey).
""More than four of every five supports of these refinancing proposals said they believe that borrowers who have demonstrated an ability to make their payments in recent years would pose little or no incremental risk to taxpayers if they refinanced. Two-thirds of supports said they believe that the lower monthly payments would create a significant stimulus for the economy,"" said Pulsenomics founder Terry Loebs.
""But the 41 percent of panel respondents who do not support these plans also hold strong views. More than two-thirds of them said they believe that rewriting loan contracts is bad policy in general, and that lowered monthly payments for borrowers ultimately translate into taxpayer and investor losses,"" Loebs continued.