Economic forecasters appear to be split on the outlook for residential real estate values.

The news this week regarding new- and-used home sales in May seems to support the views of bears like Dean Baker, co-director of the Center for Economic and Policy Research. Baker projects that home prices will decline 12 percent in 2010.

Meanwhile, Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York, predicts a gain of 2.5 percent.

Terry Loebs, managing director of MacroMarkets, which creates securities that allow investors to hedge their housing bets, says, “The width of that spread is a byproduct of uncertainty in the market.”

Source: Bloomberg, Kathleen M. Howley (06/24/2010)