Fiserv, a global financial data research firm released an article on April 8, 2010 detailing the home pricing trend and forecasts for 375 US housing markets.  The data comes from both Moodys.com and the federal government.  The report states that markets such as California, Arizona, Florida, and Nevada that saw the largest price run-ups (and

subsequently the largest bubble crash), may not see the prices of their properties return to peak levels (prices around 2006-7) until 2025 or later.

Many other markets, including Minnesota, may need to wait 10 years or more to see their prices return.  They specifically mentioned Minneapolis in a part of their analysis:

“A protracted recovery in home prices is also expected in many urban neighborhoods where predatory lending was most rampant. There, home prices rose rapidly from very low levels during the bubble years. These markets include neighborhoods in cities such as Minneapolis, Memphis and Chicago.” 

The full members only report summarizes that the Twin Cities market could be back to their peak prices between 2015 and 2025.

Despite other experts stating that prices will decline only slightly this year in the Twin Cities, the Fiserv report says that nationally, prices will decline by about 7% through the end of 2010 and then begin a slow, flat recovery in 2011.  They emphasize that this recovery will be prolonged, meaning that many markets will see multiple years of 0% price growth.

On a positive note, some areas are more fortunate such as Pittsburg, Columbia (South Carolina), parts of Texas, Washington, and upstate New York.  These areas never had the dramatic price increases and consequently will see their prices recovery relatively quickly; possibly within the next couple years.

While the foreclosures are the details of the housing market making the headlines in the news, much of the lack of momentum in the housing prices is driven by the overall state of the economy.  With consumer confidence about their jobs and economy at such a low point, many people are unwilling or unable to purchase a new home, despite the great opportunities out there now.  This has reduced demand especially in markets that lost jobs, where employment is not expected to return to peak levels for 5-10 years.