April 15th, 2010 1:43 PM by Lehel S.
Here’s another indicator that bubble-era housing prices were outrageously overblown. Home prices in some areas won’t return to those peak levels for a long, long time–decades in some extreme cases, according to a report out Tuesday from Fiserv, Inc.
In Orlando, where prices peaked in mid-2006, prices aren’t expected to return there until after 2039. The city is, in fact, still waiting for bottom: That’s expected in the second quarter of 2011. Sacramento, which peaked in late 2005, also won’t see a return for some three decades.
Long waits aren’t just expected in the boom-to-bust markets where overbuilding ushered in an era of plummeting prices and rampant foreclosures. High-levels of unemployment and a decline in manufacturing gigs has stung demand and prices in the industrial Midwest, including Michigan, Indiana and Ohio. These markets won’t return to peak levels for at least five years–and potentially more than a decade, according to Fiserv’s report.
Still, the “picture is not uniformly grim,” said David Stiff, Fiserv’s chief economist. “Some markets are poised for a relatively fast recovery, including some areas that never experienced large declines in prices.”
Markets that could see prices bounce back within the next few years include Pittsburgh, Columbia, S.C., and several metro areas in Washington, as well as Texas and upstate New York.
San Antonio looks to be a lucky market: Those prices should trough later this year, with previous peaks returning in late 2012.
Fiserv came to its conclusions using the closely-watched Case-Shiller home price indexes and data from the Federal Housing Finance Agency and Moody’s Economy.com.