Home Price Forecast '98: Booming Economy Boosts Home Prices --- San Francisco Sizzles; Detroit Still Hot; a Slight Chill in Chicago
For homeowners, these are the best of times. The economy has been expanding for 27 consecutive quarters. Over the past year, the stock market peaked and consumer confidence reached its highest level in 28 years. Mortgage interest and unemployment rates are the lowest they have been in decades. Real wages -- at least for the better-off -- are rising, and government coffers are overflowing. Even crime rates are down.</br></br>So it is only natural that home sales are breaking records and prices are beating inflation.</br></br>That's the conclusion of the latest Home Price Forecast, prepared for The Wall Street Journal by the economic research firm Case Shiller Weiss Inc. of Cambridge, Mass. The forecast reflects actual price changes in 10 of the largest metropolitan areas from August 1996 to August 1997 and projects figures to January 1999.</br></br>Not everyone feels like celebrating, however. In Chicago, where the economists predict the lowest price rises of the 10 metro areas, home prices are just keeping pace with inflation and houses are languishing on the market. "I've lowered my price $10,000, and there still have been no offers," says retired publisher Frank Albergo, whose 2,000-square-foot, turreted Norman-style home has been on the market for more than a year. It is currently listed at $239,000.</br></br>San Francisco, by contrast, is expected to remain the country's hottest and the most expensive housing market. Susan Sparks, a researcher at the University of California at Berkeley, expects a quick sale of her 2,046-square-foot tract home, recently listed for $205,000. She says 15 homes in her development have sold in the past six months, some "for their full listing price in two weeks or less."