Home values will grow incrementally by more than 4 percent a year and cumulatively by 22 percent over the next five years.

That's if growth rates exceed home value growth rates in the 12 years preceding the onset of the housing bubble that culminated in the Great Recession.

It sounds like happy days are here again in the residential real estate market, according to the Zillow Home Price Expectations Survey (ZHPES).

Zillow's panel of more than 100 professional forecasters foresee the 4.1 percent next-five-year annual home value appreciation rate exceeding the pre-housing bubble's (1987-1999) average annual appreciation rate of 3.6 percent.

The finding is the first time the predicted average annual growth rate for the next five years has surpassed pre-bubble levels since the survey's inception by Zillow three years ago.

But don't party like it's 1999 just yet.

"That said, their expectations are a bit shy of the home value gains of 5.5 percent that we saw in 2012, implying some moderation in the pace of gains. The panel expectations are consistent with continued strong home value growth this year fueled by tighter-than-normal inventory of for-sale homes and robust demand attributable to high affordability and a stronger general economy," said Zillow Chief Economist Dr. Stan Humphries.

Bring more homes to market from sellers and banks' "shadow inventory," raise mortgage interest rates, push home values too high, trip up the economy and all bets are off.

Anything can happen

It's true. A cascade of study after study points to real recovery, but anemic economic growth, creeping employment and salary gains and still tight mortgage lending could put a crimp in any forecast.

Year-by-year, Zillow says expect to see home values rise 4.6 percent this year, 4.2 percent in 2014 and then level off between 3.6 percent and 3.8 percent from 2015 to 2017.

For the five-year period, expectations for home value increases ranged from a whopping 34.2 percent, among the most optimistic quartile, to only 11.7 percent among the most pessimistic, Zillow reports.

Even at the average annual home value rate growth forecast by the most pessimistic of Zillow's forecasters, about 2.4 percent, the growth rate would not be far below the pre-bubble average of 3.6 percent.

Among single forecasters, the smallest cumulative (through the end of 2017) home value forecast was for an 11 percent depreciation.

The greatest cumulative forecast for the five-year period was for a home price appreciation rate of nearly 78 percent.

We'll all have what he's having.

©2013 Realty Times