Housing prices in the Milwaukee area peaked during the second quarter of 2007 and will not recover from the housing market collapse during the Great Recession until the fourth quarter of 2017, according to Brookfield-based Fiserv Inc.’s Case-Shiller Index.
The Milwaukee housing market still has not hit bottom, according to the index. That will happen in the fourth quarter of 2011 when prices will have fallen 15 percent from their 2007 peak.
Some metro areas are in even worse shape. Several metro areas in California, Florida, Arizona and Nevada will not see home prices return to peak levels until 2025 or later, according to the index.
The index projects that the overall U.S. housing market will not begin to recover until next year.
“Nationally, Fiserv Case-Shiller data points to a further 7 percent decline in home prices through the end of this year, with a prolonged recovery beginning early in 2011,” said David Stiff, chief economist for Fiserv. “In many markets, the emphasis is on the word prolonged. We see several powerful forces in the market that will severely hinder the housing recoveries of many metro areas, particularly in hard-hit states of California, Florida, Arizona and Nevada. It will take these markets 15 or more years before prices climb back to their peaks.”
High levels of unemployment in the U.S. have been a major contributor to home foreclosures, which has provided a significant drain on housing prices. In addition, some low income urban levels had higher levels of subprime loans, many of which have gone into foreclosure as some buyers could not afford to pay the mortgages.
However, some areas are poised for a quick housing market recovery, Stiff said, including Pittsburgh, Columbia, S.C., several metro areas in Texas, Washington DC and upstate New York.
The index, owned and generated by Fiserv, uses home price historical trend data from the Federal Housing Finance Agency and Moody’s.
