That analysis comes from David Stiff, chief economist at Fiserv, who noted that many of the markets experiencing the greatest housing price declines during the recession are now showing the greatest gains.
"That's a pattern we are seeing," said Stiff, referring to Fiserv Case-Shiller Indexes. "For example, Phoenix home prices are up nearly 15% year over year and Arizona, overall, is at a 12.7% increase. We are seeing turnarounds in Detroit (11.6%) and San Jose, California (9%), many markets that were poster children for the mortgage collapse.”
What's reversing fortunes in the troubled areas is they are no longer dominated by foreclosure sales and have returned to a more "traditional" home sale market, said Stiff. He added that in Florida—excluding pockets like Miami where home sales are up 7% year over year—prices largely remain depressed in many areas because foreclosures are backlogged and awaiting sale due to a slow-moving legal system in the Sunshine state. Stiff added that home prices in Las Vegas continue to fall.
Overall, said Stiff, the U.S. housing markets have started along a path of slow but sustainable recovery. Fiserv predicts that markets will improve slowly, especially at the start of 2013, projecting growth to be at an annualized rate of 3.3% from mid-2012 through the second quarter of 2017.
"The real estate market in the spring and summer of 2012 was the strongest since the peak of the bubble. There now is strong evidence for a slow, sustainable recovery," said Stiff.
Average U.S. home prices in the second quarter of 2012 increased 1.2% from the year-ago quarter, marking the first year-over-year increase in home prices since 2006, excluding the impact of the Federal home buyer's tax credit in 2010, noted Stiff. Overall, the 2012 spring and summer real estate market was the strongest since the peak of the housing bubble, he said.
Stiff has more encouraging lending news for CUs, noting that borrowing for durable goods is up, too. "We are starting to see that now, people buying washing machines and refrigerators, typically items that correspond with a home purchase. This is a good sign the general economy is improving, as well as the credit worthiness of borrowers."
Stiff added the recovery in auto sales last year was a forerunner of the home sales turnaround, a sign that consumers first felt enough confidence in their jobs and the economy to buy a new vehicle, and then homes.