Home Prices Fall 19% Toward a 2010 Bottom
Single-family home prices dropped 19% over the 12-month period ending in March 2009, but the bottom is in sight, according to an analysis of home price trends by Fiserv (FISV). Researchers studied more than 375 US markets based on the Fiserv Case-Shiller Home Price Index and data from the Federal Housing Finance Agency (FHFA). On average, compared to family income, US home prices at the end of Q209 jumped 7% from levels in early 2000 – when the real estate bubble began to swell. Home prices relative to income dropped from that mark in 10% of US metro market. For example, between 2000 and 2006, Los Angeles home prices doubled relative to income, but current prices in L.A. are only 25% more expensive than that they were in 2000. While Califoria and Florida home prices continued their fall, the analysis revealed a silver lining in other markets. “Housing affordability is quickly being restored in many markets and the pool of buyers who can afford to purchase homes is increasing at a rate not seen in recent years, setting the stage for home price stabilization," says David Stiff, chief economist at Fiserv, in a corporate release. Stiff added: “Over the next year, Fiserv forecasts that national home prices will drop another 11%, and bottom out in early 2010.” But Stiff warned that the recovery will be tentative. A lack of confidence in a poorly performing economy, limited access to mortgage credit and large inventories of foreclosures will continue to anchor prices, Stiff said in the release. HousingWire sources remain bearish on reports the housing market appears to be recovering based on a slowing decline among house prices and sales. An influx in foreclosures, for example, is likely to depress house prices further. Write to Jon Prior.