SALEM, Ore. (CNN/Money) - Whether home prices will rise or fall in the coming year is anyone's guess. The housing market continues to stump experts on both sides of the bubble debate.
Even so, economists at Fiserv Case Shiller Weiss think they have a pretty good idea what's in the cards for most metros in 2005.
Their prediction: Los Angeles will fizzle. Miami will sizzle.
There's some reason to believe them. Fiserv CSW has been forecasting annual home-price growth at the metro level for more than a decade, with a not-too-shabby record: the group's median forecast error is less than 2 percent.
To track housing performance, the researchers look at repeat sales data for a sample of houses in each zip code, a method they consider more accurate than simply looking at changes in an area's median home price.
They also consider past price changes, employment trends and interest-rate trends to devise a forecast for the coming year.
Finally, they make adjustments to individual areas to account for other factors that could influence an area's housing market.
What's up in L.A.?
Over the past five years home prices in the Los Angeles area appreciated 125 percent, with prices in a handful of zip codes up nearly 200 percent.
But Fiserv CSW is predicting that prices in the greater Los Angeles area will increase by only 5.8 percent in 2005, with slightly better appreciation in some L.A. markets and price declines in others.
"There is anecdotal evidence that the market there is weakening," said David Stiff, a senior economist with Case Shiller Weiss. "It hasn't worked its way into our model yet."
For that reason, the firm declined to give a forecast for individual zip codes in Los Angeles. "We are very uncertain about what will happen to home prices in Los Angeles this year," Stiff added.
Miami's market, however, may still have room to grow.
Home prices in the Miami-Fort Lauderdale metro have doubled over the last five years, and Fiserv CSW is forecasting that they will appreciate another 16.4 percent this year. "Unlike L.A., Miami has a higher ceiling [for price appreciation] because affordability is less of an issue," said Stiff.
What's the forecast for your hood? For each of the 10 largest metro regions tracked by Fiserv Case Shiller Weiss, here are the 10 zip codes with the largest median five-year price increases -- and their prospects for the coming year.
Data on five-year price change are through the fourth quarter of 2004, while the forecasted change is for the first quarter of 2005 through the first quarter of 2006.