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Fiserv Case-Shiller Home Price Insights: Home Prices Are Increasing; Many U.S. Markets Now On Path Toward Sustainable Recovery

Stocks in this article: FISV

Fiserv, Inc. (NASDAQ: FISV) today released an analysis of home price trends in more than 380 U.S. markets based on the Fiserv® Case-Shiller Indexes ®. The indexes are owned and generated by Fiserv, a leading global provider of financial services technology solutions, and data from the Federal Housing Finance Agency (FHFA).

New data from the Fiserv Case-Shiller Indexes show that many markets have started along a path of slow but sustainable recovery. Average U.S. home prices in the second quarter of 2012 increased 1.2 percent from the year-ago quarter. This marks the first year-over-year increase in home prices since 2006, excluding the impact of the federal home buyer’s tax credit in 2010. Overall, the 2012 spring and summer real estate market was the strongest since the peak of the housing bubble.

Over the next year, from the second quarter of 2012 to the comparable period of 2013, home prices are expected to increase 0.3 percent. Fiserv projects the housing recovery will gain further strength in subsequent years. Home prices are projected to grow at an annualized rate of 3.3 percent from mid-2012 through the second quarter of 2017.

Home prices appreciated in more than one-half of the 384 metro area markets in the 2012 second quarter. Many of the biggest price increases were in markets hardest hit by the housing crash, including Phoenix (14.5 percent), Detroit (11.6 percent) and Miami (6.9 percent). Some markets, particularly those still swamped by the liquidation of foreclosed properties, did experience price declines. However, there is evidence that even these markets are starting to turn the corner. For example, prices in Atlanta fell 12.2 percent from the year-ago quarter. But on a sequential quarter basis, prices in Atlanta were up 3.8 percent in the recent period.

“The real estate market in the spring and summer of 2012 was the strongest since the peak of the bubble. There is now strong evidence for a slow, sustainable recovery on both the supply side and the demand side,” said David Stiff, chief economist, Fiserv. “On the demand side, existing home sales increased to their highest levels since 2007, save for the sale spikes caused by the home buyer tax credit. At the same time, supply is decreasing. Inventories of unsold homes are now 20 percent lower than they were last year. Shadow inventory, which includes properties in pre-foreclosure or foreclosure, continues to decline. New foreclosure activity has hit a five-year low, reducing the number of foreclosed homes for sale. In many markets, limited inventories are holding back sales activity as potential buyers are unable to find properties to purchase, pushing up home prices as buyers compete for a dwindling supply of homes for sale.”

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