It will take another two years before home prices in the San Diego area return to their pre-recession peak, the online real estate service Zillow reported Monday.
Zillow said average home values in the nation’s 100 largest metropolitan areas will not reach their 2007 levels again for another 2.7 years. The estimate for San Diego was 1.9 years.
Tech meccas Austin and San Jose have already recovered, and San Francisco is a third of a year away, Zillow said. Los Angeles will take a year and a half.
Nationally, home values remain 11.3 percent below their 2007 peak. Looking ahead, U.S. home values are expected to rise another 4.2 percent through the second quarter of 2015, according to the Zillow Home Value Forecast.
Notable large metros where full recovery in home values will take much longer include Minneapolis (14.5 years), Kansas City (12.5 years) and Chicago (11.7 years).
“In dozens of markets, homeowners that bought at the peak of the market in 2006 or 2007 will have to wait until 2017 or later to get back to the breakeven point on their home, a lost decade in which they will have built up no home equity. This is reflected in stubbornly high negative equity and effective negative equity rates, with more than a third of Americans with a mortgage lacking enough equity to realistically list their home for sale and buy another,” said Zillow Chief Economist Dr. Stan Humphries.
“But there is a silver lining as we navigate these tricky middle innings of the recovery. Because home values remain so far below their peak levels in so many areas, it is still possible for buyers to find bargains. This will be critical to maintaining home affordability over the coming years, especially as mortgage interest rates rise.”
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