BROOKFIELD, Wis.-A new analysis of 375 U.S. markets in the Fiserv Case-Shiller Index found that during the fourth quarter of 2009, U.S. home prices were up in 155 out of 384 metro areas, including markets in California, Ohio, Michigan and Washington.
However, average U.S. home prices were down 2.5% from Q4 2009, which can be attributed to the continued high level of unemployment, rising interest rates and the large number of distressed properties that remain in the "sand states," according to Fiserv. "The first-time homebuyer tax credit has expired, the Federal Reserve has stopped buying residential mortgage backed securities (MBS) and the projected number of foreclosures remains extremely high," Fiserv said "As a result, markets with recent price increases may see small price declines before prices finally stabilize at the end of this year or early 2011."
The analysis found that over the past year, the U.S. housing market continued its price correction, with single-family home prices across the U.S. falling an average of 2.5% over the 12-month period ending Dec. 31, 2009. The analysis forecasted another 3.1% fall in average single-family home prices over the next 12 months, with steep home price declines to continue in markets hurt most by the housing crisis. From Q4 2009 through the Q4 2010, average home prices in Nevada, Arizona and Florida are projected to decline 9.2%, 9.5 % and 7.7%, respectively. Among the other findings:
• California markets collapsed about one year before much of the rest of the U.S.
• Markets in the interior have also experienced a price bounce, mainly due to strong investor demand. In Washington, home prices were up 5.2% year-over-year.
• Ohio and Michigan are seeing signs of stabilization, with housing very affordable across metro areas in these states.
• Markets where investor purchases of foreclosed homes have dominated housing sales are also coming back into balance., including Minneapolis, Detroit and Memphis.
