U.S. home prices are expected to decline 1.57 percent during the fourth quarter of 2011 after falling 0.4 percent through September, according to the December Zillow Home Price Expectations Survey. Prices are expected to decline until the market’s bottom is reached in late 2012 or early 2013.

After 2013, the survey panelists expect a relatively steady annual appreciation rate of about 3 percent through 2016, which is slightly below appreciation rates experienced during the pre-bubble years. “There is a consensus among the nation’s top housing experts that we have not yet reached a bottom and are instead working through a prolonged bottoming process,” said Dr. Stan Humphries, Zillow chief economist. “Negative equity, unemployment and low consumer confidence remain the key factors delaying a true recovery.”

Looking at the expected housing market performance through the five year period ending in 2016, there continues to be significant variation among the panelists regarding their individual home price forecasts. The most optimistic quartile of panelists projects nearly 18.3 percent price growth over the next five years, while the most pessimistic quartile projects a 1.4 percent decline.

“Given the current economic climate and uncertainty around the government’s future role in housing, it’s not surprising to see such a wide dispersion in long-term forecasts,” Humphries said. “As the market starts to stabilize, we should see individual forecasts start to converge.”