Analysts project home prices to remain flat in 2011

Experts at the University of Chicago predicted home prices to hold steady next year, adding that improved moving activity might support a better-than-expected economic recovery.

Erik Hurst, a professor of economics at the university's Booth School of Business, spoke at the school's annual business and economic forecast luncheon, saying that he does not expect home prices to fall further in 2011 - though they won't increase significantly either. An excess supply of homes on the market and weak demand from homebuyers means that prices will more likely stay flat at their current levels, meaning those moving into new homes might be able to expect sustained levels of high affordability.

Hurst added that increased moving activity is needed to take a bite out of that elevated inventory. If it does, panelists say the economy could recover better compared to some conservative estimations.

"I don't agree with those who say we are in an extended period of low growth," said Randall Kroszner, also a professor of economics at Booth. "But we are unlikely to have a powerful recovery either."

Other predictions - both from the National Association of Realtors and the private firm Fiserv - expected national home prices to decline again in 2011 before climbing in 2012, meaning homebuyers might only have so long to hire a moving company and take advantage of low prices.
 

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