More bad news on the negative equity front.
Real estate markets that experienced the greatest price bubbles won’t see home prices returning to peak levels until 2025 or later, according to Fiserv.
For those who bought during the boom years between 2005-2008, it may be difficult to see the light at the end of the tunnel.
In Sacramento, California, prices aren’t expected to return to their previous boom-time peaks until after 2039. Same goes for Orlando, Florida.
It’s hard to be optimistic in a situation like that…
“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, in a statement.
“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.”
These “forces” include high levels of unemployment and a steep decline in manufacturing jobs – a protracted recovery is also expected in urban areas like Chicago and Memphis where predatory lending ran rampant.
It’s not all bad news though; areas that didn’t experience large run-ups in home prices, such as Pittsburgh, PA and Columbia, SC, along with many parts of Texas and upstate New York, are expected to recover relatively quickly.
Last month, First American CoreLogic said the typical homeowner who is currently underwater on their mortgage won’t see positive equity until 2015.