Boom-Era Prices Won't Return Until 2025 for Some Markets says study

By
Real Estate Agent with Palatium Auction and Appraisal Service, Real Estate Auctions, Estate, Moving, Downsizing Auctions 618-233-1000 USPAP Appraisals proesch@ptauctions.net

For many U.S. markets, the return to peak home prices will be a long, slow road, according to Fiserv, Inc. The Wisconsin-based financial services technology company says markets that experienced the biggest price bubbles, including certain metro areas in California, Florida, Arizona, and Nevada, won’t see home prices return to pre-crisis levels until 2025 or later.

That represents an unprecedented market cycle that will last a full generation from the top of the market in 2006 and 2007. Many other markets, including major urban centers in the Northeast and industrial Midwest, may need to wait a decade or more until prices return to their earlier peaks, Fiserv’s analysis indicates.

Nationally, Fiserv Case-Shiller data points to a further seven percent decline in home prices through the end of this year, with a prolonged recovery beginning early in 2011, according to David Stiff, Fiserv’s chief economist. “In many markets, the emphasis is on the word ‘prolonged,’” he said.

“We see several powerful forces in the market that will severely hinder the housing recoveries of many metro areas, particularly in the hard-hit states of California, Florida, Arizona and Nevada. It will take these markets 15 or more years before home prices climb back to their peaks,” Stiff explained.

Although bubble markets have received the greatest attention in home price discussions, Fiserv says there are a number of dynamics affecting the pace of home price recovery in other regions.

High levels of unemployment associated with the recession and the steep decline in manufacturing jobs has reduced housing demand and prices in many metro areas in the industrial Midwest, including Michigan, Indiana, and Ohio. Such markets, at the epicenter of job losses in manufacturing, are not expected to return to peak levels for at least five years, and potentially more than a decade, according to Fiserv’s study.

A protracted recovery in home prices is also expected in many urban neighborhoods where predatory lending was most rampant, the company said. There, home prices rose rapidly from very low levels during the bubble years. These markets include neighborhoods in cities such as Minneapolis, Memphis, and Chicago.

But the picture is not uniformly grim, according to Stiff. “In fact, our analysis projects that some markets are poised for a relatively fast recovery, including some areas that never experienced large declines in prices,” he said.

Stiff says those markets that could see prices come back within the next few years include Pittsburgh, Pennsylvania; Columbia, South Carolina; and several metro areas in Texas, Washington, and upstate New York.”

Fiserv’s predictions are in line with an earlier story from DSNews.com, in which the Federal Reserve Bank of New York discusses how some markets, such as upstate New York, dodged the housing bust bullet.

Stiff also reiterated a number of trends that have defined the housing market in recent months. He noted that home sales have grown dramatically over the past few quarters, posting their largest gain since 2006. This was attributed to lower prices, almost record-low mortgage interest rates, and the $8,000 tax credit for first-time homebuyers. Stiff says another factor that has temporarily slowed the erosion of home prices has been banks’ inability to effectively sell homes with distressed mortgages.

Detailed home price data and forecasts for 381 U.S. markets can be found at the Fiserv Case-Shiller Web site.

Read the Study

Posted by

Paul
Paul Roesch
Realtor, Auctioneer, CAI, AARE, CES, GPPA, ATS
Marketing Director 
Certified Distressed Property Expert, CDPE
618-407-8479 cell
proesch@ptauctions.net

 Add me as a Friend on Facebook Paul M. Roesch                                                                        

Free Sign Bidder Early Bird Notification of Upcoming Auctions

Auctionitnow  Father Time Auctions St Louis MO

All original text, video, and photo content is the exclusive property of Paul Roesch and / or Palatium Auctions (the Company) and may not be used without expressed written permission. All information deemed reliable but not guaranteed. All personal, real and intellectual property is subject to prior sale, change or withdrawal. Neither the Company or information provider(s) shall be responsible for any typographical errors, misinformation, and misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The Company has no control over the quality, safety or legality of the Auction Items listed, the truth or accuracy of the listings or any other information provided by Sellers about the Items. Listings may be sold, withdrawn at any time or subject to change without notice.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Missouri Saint Louis County
Tags:
buy at auction
caseshiller
sell at auction
missouri real estate auctioneer paul roesch
father time accredited real estate auctions

Post a Comment
Spam prevention
Spam prevention
Post a Comment
Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
400,275

Paul Roesch CDPE 618-233-1000

Real Estate Auctioneer CAI St Louis MO Auctions
How Does an Auction Work
*
*
*
*
Spam prevention

Additional Information