Nashville Home Prices are Stabilizing!

Nashville Business Journal - by Eric Snyder
Date: Tuesday, February 1, 2011, 12:53pm CST

After five years of record home price declines, national home prices showed some signs of stabilizing in the third quarter of 2010, according to analysis released today by Fiserv Inc. using its Fiserv Case-Shiller Indexes.

In the third quarter, national home prices declined by 1.5 percent compared to one year ago. The decline was smaller in the Nashville area, where prices declined by 0.4 percent over the last year.

According to Fiserv, 25 percent of metro areas have seen their home prices stabilize. Fiserv estimates that 75 percent of markets will stabilize by the end of this year, and that 100 percent of markets will do so by the end of 2012.

Fiserv, however, notes that there will be many ‘false starts’ on the path to recovery.

“Large supplies of foreclosed properties will continue to be the biggest downside risk for home prices and metro area housing markets,” said David Stiff, Fiserv’s chief economist. “Foreclosure activity declined at the end of 2010, but sales activity of bank-owned homes increased. In bubble and crash markets, the uncertain timing and volume of bank liquidated properties will cause home prices to bounce around their lows for many years.”

Fiserv predicts that the average price for a single-family home will drop another 5.5 percent over the next 12 months. In Nashville, a drop of 2.6 percent is forecast.