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Strong 2012 Predictions from Fiserv Case-Shiller Indexes

In opposition to the recently recorded declines, the ""Fiserv Case-Shiller Indexes"":http://www.caseshiller.fiserv.com/indexes.aspx predict stable numbers around the country by 2012. Notable stats from the 380 markets that the survey examined include a forecasted rise in housing affordability to pre-crisis levels and an increase in home pricing strength near the start of 2012.


Using data from the ""Federal Housing Finance Agency (FHFA)"":http://www.fhfa.gov/, the proprietary indexes track real estate pricing around the U.S.

The current statistics note that home prices fell in 302 of 384 metro regions during the first half of this year, by an average of 5.1 percent. The company credits foreclosure sales and the lowered demand for homes in the wake of the tax credit initiative for the general drop, which many are calling a double-dip.

The Fiserv Case-Shiller Home Price Insights, available now, indicate that housing affordability could rise, since current pricing is about 5 percent above data from 2000, and additionally, though the numbers show a continued dip this year, the survey demonstrates that an appreciation in overall home pricing is likely to kick off 2012.

But the most important prediction resulting from the study is Fiserv's assertion that home pricing will rise in 95 percent of metro areas by the first quarter of 2013.

Commenting on the real estate market around the U.S., David Stiff, Fiserv's chief economist, said, ""The stabilization of housing markets depends greatly on household confidence in the strength of the economic recovery. Unfortunately, recent economic news has done little to build confidence.


""Weak job growth numbers in May and June, political wrangling over the Federal government debt ceiling, and the ongoing debt crisis in Europe have all increased pessimism,"" Stiff added. ""Households will not become more optimistic about housing markets until they are convinced that the job market is improving and that politicians will not allow debt problems to become new economic catastrophes.""

Stiff continued, elaborating on the positive trends that influenced the positive outlook, ""Mortgage delinquency rates have been falling for more than a year. Foreclosure rates have started to decline. The flood of bank-owned sales, which has swamped many markets, will finally begin to recede this year as fewer houses enter the foreclosure pipeline. Meanwhile, housing affordability has nearly returned to pre-bubble levels. Relative to family income levels, the average U.S. home is now only 5 percent more expensive than it was in 2000.""

Other interesting data within the Fiserv Case-Shiller Indexes included the unsurprising correlation that, in eight out of 10 poorly performing markets this year, the unemployment rate had also risen above the national average.

The survey also showed that five of the top 10 strongest markets during the past five years are in Texas, specifically the Midland metro region, which recorded a 42 percent rise in home pricing between 2006 and the first quarter of 2011.

The four top performing metro areas in Washington state show a fortunate forecast, with Fiserv Case-Shiller numbers demonstrating that the Tacoma, Kennewick-Pasco-Richland, Spokane, and Olympia areas set to garner the greatest increase in home pricing between the fourth quarter of this year and the first quarter of 2012.

Fiserv is known for providing information management and e-commerce platforms for financial institutions worldwide, and the company's popular Fiserv Case-Shiller indexes are produced jointly by ""Fiserv"":http://www.fiserv.com/ and ""Moody's Analytics."":http://www.moodys.com/

About Author: Abby Gregory


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