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Housing experts offer ideas on the new normal in wake of downturn

By Lauren Beale, Los Angeles Times –

DENVER — What’s considered normal in light of the housing downturn? Home price appreciation of 3 percent to 5 percent, 1.6 million household formations a year, and a 65 percent homeownership rate, according to three economists who offered their housing outlooks Friday at the annual National Association of Real Estate Editors conference.

Major take-away: “The bottom will be as equally dramatic as the recession has been,” said Stan Humphries, Zillow’s chief economist. Housing sales and price changes will vary considerably by geographic market and within those markets. Los Angeles will see a 0.9 percent uptick from March 2012 to March 2013. Zillow forecasts Chicago will see a 3.8 percent drop in that period.

Major eye-opener: When National Association of Realtors economist Lawrence Yun offered his opinion that there could be 10 percent home price appreciation nationally next year as we emerge from a three-year market bottom. He retracted that in the question-and-answer session. The official NAR prediction is in the 3 percent to 5 percent range.

Major disagreement: Another Yun prediction is a 70 percent to 80 percent growth in housing starts. David Crowe, the chief economist of the National Association of Home Builders, begged to differ. “Plants have been mothballed,” he said. “It will take a lot of time and money before we can come back.”

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