An analysis released last week by financial services technology provider Fiserv, Inc. says that residential real estate markets in California, Arizona, Nevada and Florida won’t be back for another 15 years or later.
For Sacramento, make that 29+ years. Fiserv says that Sacramento home prices peaked in the fourth quarter of 2005 and are expected to reach bottom at the end of June of this year. They are not expected to return to peak 2005 levels until after 2039.
From the Fiserv press release on their latest home price report:
“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. In many markets, the emphasis is on the word ‘prolonged,'” said David Stiff, Chief Economist, Fiserv. “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.”
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.”