Markets that are starting a comeback
Good news if you’re selling real estate in some areas of Pennsylvania, South Carolina, Texas, Washington and New York– those markets that could see prices come back within the next few years. Specifically, Pittsburgh, Pennsylvania; Columbia, South Carolina and several metro areas in Texas, Washington and upstate New York may see earlier market comebacks than the rest of the United States, according to a Fiserv analysis.
The markets that experienced the greatest price bubble, including certain metro areas in California, Florida, Arizona and Nevada, won’t see home prices return to peak levels until 2025 or later, according to a new report from Fiserv, Inc.
That represents an unprecedented market cycle that will last a full generation from the top of the market in 2006-2007. 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 market peaks.
Nationally, Fiserv Case-Shiller data points to a further 7 percent decline in home prices through the end of this year, with a prolonged recovery beginning early in 2011.
While the bubble markets have received the greatest attention, there are other 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.
A protracted recovery in home prices is also expected in many urban neighborhoods where predatory lending was most rampant. 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.