The housing recovery began approximately 3 years ago, but many local markets have still to regain values lost during the recent recession. The question most people want to know is how long will it take for home values to achieve their pre-recession levels.
Unfortunately this process could take years, especially while the housing recovery is still very much on-going. At the moment home values are around 11.3% below their peak values seen in 2007. According to the article in aol.com, home values are expected to increase by a further 4.2% through to the second quarter of next year. These figures are from the Zillow Home Value Forecast, and it's expected it will take 2.7 years for home values throughout the country to reach their pre-recession levels, assuming that prices continue to appreciate at the levels predicted. This would mean home values in the US wouldn't return to their previous peak values until the first quarter of 2017, nearly a decade since the housing recession first began, and it's thought full recovery in the real estate market could take even longer. This is because the rate of home value appreciation is expected slowdown in the next few months and years.
It's predicted that in 50 out of the 100 largest metro markets it will take three years or possibly longer for home values to achieve their previous peaks. There are some large metro areas where full recovery will take longer than 10 years. It's thought that recovery will take 11.7 years in Chicago, 12.5 years in Kansas City and 14.5 years in Minneapolis.
Real estate experts point out there are literally dozens of markets where homeowners who bought property at the peak of the market back in 2006 or 2007, will have to wait at least until 2017 to break even on their properties. This means they will have spent a full decade being unable to build up any home equity, a fact that is reflected in the high levels of negative equity. Approximately a third of American homeowners with mortgages do not have enough equity to realistically sell their property and by another.
But it's not all bad news, as low home values are making it easier for buyers to find bargains, and home affordability should remain good over the coming years. Home values in the US increased by 6.3% year on year, to the year ending in the second quarter of 2014. This is the slowest rate of home value appreciation seen this year and it shows the market is gradually returning to normal where values generally increase by 3% annually.