The metro Milwaukee housing market’s decline slowed last year and is expected to hit bottom this year, according to Brookfield-based Fiserv Inc.’s Case-Shiller Index.
According to the index: the metro Milwaukee housing market in the third quarter of 2010 had declined 10.9 percent since 2007, but had declined only 2.2 percent since 2009.
The metro area’s housing market is expected to dip just 0.7 percent next year, according to the index.
The Case-Shiller Index predicts that 75 percent of U.S. metro areas will have their housing markets will stabilize by the end of 2011. The other 25 percent are expected to become stable by the end of 2012.
In the third quarter of 2010, U.S. single-family home prices saw an average decrease of just 1.5 percent over the year-ago quarter, as a growing number of metro area housing markets begin to stabilize after five years of record home price declines, according to Fiserv.
Fiserv and Moody’s Analytics report that home prices have already leveled out in one out of four metro areas. Those markets include San Diego, Washington D.C. and San Francisco.
Some markets, including Milwaukee, Minneapolis, New York City and Portland, Ore., will stabilize by the end 2011.
The markets that are in the worst shape will not stabilize until the end of 2012. Those markets include: Miami, Phoenix and Las Vegas.
Even as metro markets stabilize, the Fiserv Case-Shiller data analysis indicates a slow recovery in home prices with many false starts, especially in markets with large amounts of foreclosed properties.
“Large supplies of foreclosed properties will continue to be the biggest downside risk for home prices and metro area housing markets,” said David Stiff, chief economist, Fiserv. “Foreclosure activity declined at the end of 2010, but sales activity of bank-owned homes increased. In bubble and crash markets, the uncertain timing and volume of bank liquidated properties will cause home prices to bounce around their lows for many years.”
Data from the Fiserv Case-Shiller showed that improved housing affordability is luring many buyers into the market, as the huge decline in home prices and low mortgage interest rates have reduced the cost of owning a home to pre-bubble levels. Other factors, however, are dampening demand.
“Since a significant number of households no longer have access to mortgage credit, improving affordability does not necessarily translate into sustained housing demand in every metro market,” said Stiff.
