Real Estate Recovery Predictions in US

The Case-Shiller Home Price Indices are the leading measures for the US residential housing market, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions.

One thing that created a lot of buzz is the Case-Shiller map predicting when home prices will rebound to their peaks. In a press release titled For Many U.S. Markets, the Return to Peak Home Prices Will Be a Long, Slow Road

Fiserv and Case-Shiller teamed up to create their prediction. The report they released on April 8, 2010 seems to have been reasonably accurate so far – we will see about the rest.

“Nationally, Fiserv Case-Shiller data points to a further seven percent decline in home prices through the end of this year (2010), 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.”

Here is the map that accompanied the press release:

Case-Shiller map of real estate recovery in the US

This suggests for Puget Sound homeowners that the FHFA’s Home Pricing Index (HPI) peaked in Q2 of 2007. Puget Sound devaluations have been 30-40%, depending upon the location and price range of your home. If Case-Shiller is correct, we should experience an average of 7-10% appreciation over the next 4 years.

LINK: Source of the Case-Shiller map