Survey: Nearly Half of Economists See Double-Dip Before Year-End

Almost half of the 111 economists and real estate experts polled this month by an investment and financial technology firm are forecasting a double-dip in home prices to happen this year, and not a single panelist expects property values to recover to the pre-bubble trend for at least the next five years.
[IMAGE] The survey was conducted by New Jersey-based ""MacroMarkets"":http://www.macromarkets.com, which was founded by Robert Shiller, real estate sage and namesake of the closely-watched Case-Shiller Home Price Index.

""Overall, the sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate,"" Shiller said. ""Now they are expecting only a weak recovery, and even that is not until 2013.""

Shiller added, ""This uninspiring view must be influenced by the persistently weak market fundamentals - high

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unemployment, supply overhang, an unabated foreclosure crisis, and constrained mortgage credit.""

In a similar survey conducted in December, only 15 percent of the panelists were projecting that a new post-crash low would materialize for national home prices, Terry Loebs, MacroMarkets managing director, explained.

Now, just three months later, almost 50 percent are expecting a double-dip by the end of 2011.

Loebs believes many more experts are now projecting a double-dip after witnessing what he describes as ""the double-dead cat bounce"" that came in the wake of expired government stimulus programs, namely the homebuyer tax credits.

The half of the panel that's forecasting a new low for home values may not be too far off base.

Loebs notes that after weak performance in the last quarter of 2010, actual home prices at the national level are now less than 1 percent away from establishing a new post-crash low, and several firms that conduct regular price studies have already warned that the numbers are edging dangerously close to double-dip territory.

The consensus among the panel of economists and real estate experts is that home prices will fall by an average of 1.4 percent over the course of this year.

Loeb described the latest survey results as ""the most pessimistic collected to date.""