Fiserv Case-Shiller Home Price Insights: Housing Market Returning to Normal, Poised To Extend Gains

  Fiserv Case-Shiller Home Price Insights: Housing Market Returning to Normal,
  Poised To Extend Gains

  *Home prices projected to grow 3.7 percent between Q3 2013 and Q3 2014
  *Home prices in nearly all metro areas on track to increase in 2013
  *Trends point to a return to a normal housing market, with prices projected
    to grow 3.3 percent per year over the next five years

Business Wire

BROOKFIELD, Wis. -- March 4, 2013

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).

Fiserv Case-Shiller projects home prices to increase 0.6 percent over the
12-month period from the third quarter of 2012 to the comparable period of
2013. The recovery is expected to gain further momentum in subsequent years:
home prices are projected to grow at an annualized rate of 3.3 percent from
the third quarter of 2012 to the third quarter of 2017. Both home prices and
home sales volumes increased steadily throughout the last year, making 2012
the first positive year for both of these metrics since the housing market
crash, when the gains induced by the home buyer tax credits in 2009 and 2010
are excluded.

“2012 was the first year since 1997 that the housing market has resembled
something recognizable as normal. For the past 15 years, home price changes
and sales volumes have either been boosted by a bubble mentality or crushed by
crash psychology,” said David Stiff, chief economist, Fiserv. “Back in 1997,
housing prices grew 3 percent, just below the 5 percent long-term average rate
of appreciation. From 1998 to 2006, prices appreciated at levels above 5
percent, with double-digit price increases in many of those years. Then, after
2006, the market collapsed as euphoria turned to panic. It took until the end
of 2011 before housing markets finally started to stabilize. The latest
Case-Shiller results show a return to a historically normal pace of price
appreciation in the last year.”

The recovery in home prices has been solid and broad-based. At the end of the
2012 third quarter, prices were rising in approximately 62 percent of all U.S.
metro areas, compared to 12.5 percent in the same period a year ago. Average
U.S. home prices increased 3.6 percent from the third quarter of 2011 to the
comparable period of 2012. Many of the metro areas that suffered the most
severe declines during the housing market crash enjoyed the highest price
increases in that period.

Fiserv Case-Shiller projects that by the end of 2013, home prices will be
rising in nearly every metro area in the U.S. Some markets may experience
short-term double-digit price jumps that could be partially reversed by price
declines as large tranches of bank-owned inventory (REO) are liquidated. In
other markets, price appreciation will slowly return to normal rates as home
buyers regain confidence that the market has found its footing.

Stiff cautioned that the parallels to previous years should not be overstated.
Unlike in 1997, there are millions of homes with delinquent mortgages, in the
foreclosure process, or in REO inventories listed for sale or waiting to be
sold. But many trends are positive. With both prices and mortgage payments at
historic lows relative to income, Fiserv Case-Shiller expects stronger demand
for housing, and the sector once again having a positive impact on the
economy.

“The number of new housing units being built per household is near a record
low. As momentum in the housing market builds, we will see the residential
real estate sector once again make large contributions to the economic
recovery. If residential investment – which encompasses all direct spending on
residential real estate construction and activity – returns to its 1997 level
over the next two years, then housing will boost overall economic growth by
0.5 percentage points in 2013 and 2014,” Stiff continued.

“In all of the bubble-crash markets, foreclosures will have a persistent but
diminishing drag on price appreciation. Since the timing of the disposition of
foreclosed properties can be highly uncertain, we will witness choppy price
movements as individual metro markets stabilize. For example, in late 2011,
prices in Atlanta dropped sharply because of a substantial jump in REO sales,
and it is possible that we will see similar, temporary price declines in other
markets as subsiding waves of foreclosed properties buffet these markets. In
other markets, investor demand is quickly absorbing listed REO properties, and
as a result, foreclosures are no longer pulling home prices downward.”

“Although some recent real estate activity has been speculative, it seems as
if buyers have more realistic expectations about housing market returns after
having lived through the largest housing market crash in U.S. history,” Stiff
added. “But even if bubble mentality is creeping back into some markets,
houses are much cheaper now than they were in 1997, so it would take a much
longer run of double-digit appreciation to lead to the price extremes that we
saw at the peak of the bubble in 2006.”

The Fiserv Case-Shiller Indexes, which include data covering thousands of zip
codes, counties, metro areas and state markets, are owned and generated by
Fiserv. The historical and forecast home price trend information in this
report is calculated with the Fiserv proprietary Case-Shiller indexes,
supplemented with data from the FHFA. The historical home price trends
highlighted in this release are for the 12-month period that ended September
30, 2012. One-year forecasts are for the 12 months ending on September 30,
2013.  The Fiserv Case-Shiller home price forecasts are produced by Fiserv and
Moody’s Analytics.

Representative home price data for major U.S. markets:

                                                        
Metro Area          Population    Change in    Change in    Forecast
                                                                    Change
                      (2011)          Home           Home           in Home
                                      Prices         Prices         Prices
                                      (2009:Q3       (2011:Q3       (2012:Q3
                                to           to           to
                                      2012:Q3)       2012:Q3)       2013:Q3)
United States       311,591,917   -1.3%        3.6%         0.6%
Austin, TX            1,783,519       2.0%           3.0%           0.3%
Baltimore, MD         2,729,110       -5.1%          1.9%           -0.2%
Columbus, OH          1,858,464       -0.9%          2.3%           -0.2%
Fort Worth, TX        2,180,758       -1.1%          1.1%           0.9%
Indianapolis, IN      1,778,568       -1.1%          0.5%           -1.3%
Jacksonville, FL      1,360,251       -11.7%         0.3%           -4.1%
Kansas City, MO       2,052,676       -5.1%          -0.9%          -1.5%
Louisville, KY        1,294,849       -1.3%          0.1%           -0.5%
Milwaukee, WI         1,562,216       -6.0%          -0.8%          -0.9%
Nashville, TN         1,617,142       -0.2%          2.3%           0.4%
New Orleans, LA       1,191,089       -0.9%          2.6%           0.7%
Orlando, FL           2,171,360       -3.6%          7.9%           -8.3%
Philadelphia, PA      4,030,926       -5.4%          -0.6%          0.2%
Raleigh, NC           1,163,515       -5.0%          -1.0%          -1.4%
Sacramento, CA        2,176,235       -3.7%          6.1%           -5.4%
Salt Lake City,       1,145,905       -5.2%          2.5%           4.6%
UT
San Antonio, TX       2,194,927       -0.5%          0.7%           0.8%
San Jose, CA          1,865,450       14.6%          12.5%          0.7%
St. Louis, MO         2,842,155       -5.3%          2.2%           -2.3%
Tucson, AZ          989,569       -12.4%       8.2%         2.2%

Additional Resources:

  *Fiserv Case-Shiller - www.caseshiller.fiserv.com
  *Federal Housing Finance Agency (FHFA) - http://www.fhfa.gov/

About Fiserv

Fiserv, Inc. (NASDAQ: FISV) is a leading global technology provider serving
the financial services industry, driving innovation in payments, processing
services, risk and compliance, customer and channel management, and business
insights and optimization. For more information, visit www.fiserv.com.

FISV-G

Contact:

Media Relations:
Julie Nixon
Senior PR Manager
Fiserv, Inc.
678-375-3744
julie.nixon@fiserv.com
or
Additional Contact:
Wade Coleman
Director, Public Relations
Fiserv, Inc.
678-375-1210
wade.coleman@fiserv.com
 
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