They Said What? House Prices

Last week, we learned that the S&P/Case Shiller indexes of single-family house prices hit multi-year lows in November, after rising briefly earlier in the year.

Will house prices finally bottom out this year?

Jan Hatzius

Chief Economist, Goldman Sachs
Yes, by late 2012, but near-term declines still seem likely, based on the still-large excess supply in many markets. House prices now appear fairly valued based on demographic trends, income, cost of capital and construction costs.

Neil Dutta

U.S. Economist, Bank of America-Merrill Lynch
No. We expect home prices to fall another 6% to 7% through the first quarter of 2013. A temporary lull in foreclosure liquidations has helped give the illusion of a bottom, but a foreclosure inventory overhang that is fairly widespread still remains.

Mark Zandi

Chief Economist, Moody's Analytics
Yes. Foreclosures will peak after state attorneys general settle with mortgage servicers later this year. Investor demand should limit price declines to less than 5%.

Ian Shepherdson

Chief U.S. Economist, High Frequency Economics
Sales are set to rise sharply this year, thanks to the easing of mortgage-lending conditions, very low mortgage rates and the improvement in the labor market. Prices should stabilize by summer.

-- Gene Epstein