NEW YORK (MainStreet) – Homeowners won’t want to hear this, but the average price of a U.S. home has declined by one-third since 2006. The good news is that things should be getting better in the not-too-distant future.
That last sentence may be difficult to believe for homeowners, who saw the value of their homes slide further at the end of last year.
According to the U.S. Commerce Department, the average sale price of a new U.S. home in December 2011 was $266,000, and sales of new single-family homes that month were at a seasonally adjusted annual rate of 307,000, down 2.2% from November 2011.
The Commerce Department also reported that there were an estimated 302,000 new homes sold in the U.S. overall in 2011 – 6.2% lower than in 2010.
Still, homeowners may take some solace in a report out today from Fiserv Case-Shiller that indicates that although the housing market has taken a beating since 2006, the tide may finally be turning.
“While prices continued to fall in most markets, sales activity picked up at the end of 2011, setting the foundation for price stabilization in 2012,” Fiserv Case-Shiller’s Chief Economist David Stiff said in an official statement. “We stand by our projection that average U.S. home prices will move sideways in 2012. But we do anticipate that increasing sales activity will begin to drive small increases in prices in as many as half of U.S. metro areas.”
Stiff says that select U.S. cities can expect to see price upgrades right away.
“Some larger metro areas that escaped the worst of the home price bubble, such as Houston, Fort Worth and Salt Lake City, can expect increases of 1% to 3%,” he adds. “Many smaller metro areas, such as Boise and Albuquerque, are forecast to see increases of 4% to 6%.”
The Case-Shiller report isn’t all rosy, though, as the following data indicates:
- The average U.S. home price has fallen by 33% since 2006.
- U.S. home prices fell by 3.9% in the third quarter of 2011, compared to the third quarter of 2010.
- In 2011, home prices fell in 337 of 384 U.S. metro areas tracked by Fiserv Case-Shiller.
There’s a good reason why Stiff uses the term “sideways” to define the 2012 housing market. Fiserv Case-Shiller says a real home price recovery won’t come until the fourth quarter of 2012, and will carry over into 2013. Fiserv Case-Shiller estimates that average U.S. prices should fall 2.7% by the third quarter of 2012, then rise 3.8% by the third quarter of 2013.
Why the bump-up in 2013? Stiff says that, after a long wait, broad economic indicators are mostly pointing upward.
“Consumer confidence remains low, but has bounced back from its sharp decline following the downgrade of U.S. debt,” he adds. “Auto sales have also rebounded after stalling in the summer, which indicates an increasing willingness of consumers to purchase big-ticket items. If the job market continues to improve, then the rebound in consumer confidence will be sustained this year and more households will be willing to purchase the biggest ticket item, a house.”
That could be a big “if,” but Fiserv Case-Shiller seems pretty confident in its numbers. To homeowners thirsty for some good news, that’s one long, cool drink of water.
For more updates on the housing industry, check out MainStreet’s Real Estate topic page!