Although reports earlier this year projected that the housing market might start to make a slow but significant recovery sometime in 2012, the “recent spate of bad economic news that has been making headlines over the past several weeks” has quashed that hope, according to Fiserv/Case-Schiller Indexes. Now, the recovery likely will not occur until “well into the first quarter of 2013 before median home prices across the nation will even be on a par with prices from the first quarter of this year”[1]. Analysts blame the weak job market and the debt ceiling fiasco for the delayed recovery. “Every piece of bad news causes more people to be more nervous,” explains David Stiff, Fiserv’s chief economist. “Unfortunately, recent economic news has done little to build confidence [in the housing market],” he added, emphasizing that the housing market “depends greatly on household confidence in the strength of the economic recovery.”

The report went on to predict markets in which housing prices are expected to continue to fall, pinpointing the link between unemployment and an expected future drop in home prices as the recovery’s biggest problem[2]. Some areas of the country, however, can expect more trouble than most. Leading the list is Naples, Florida, which has an unemployment rate of 10.5 percent and a projected home-price drop of 16.6 percent. Naples is followed by Riverside-San Bernardino, California and Las Vegas, Nevada, with projected price drops and unemployment rates of 15.6 percent and 13.7 percent, and 13.9 percent and 12.4 percent, respectively. Las Vegas is projected to hit its lowest housing price level in the fourth quarter of 2012, as is Naples. Riverside-San Bernardino is projected to hit bottom in Q1 of 2012. Although the projected drop in value is not quite as bad in Miami, Florida, along with Fort Lauderdale boasts the dubious honor of “latest recovery” in the top ten worst markets for the coming year, with a projected bottoming out of the market in the second quarter of 2013.

Clearly, these numbers indicate the need for some serious planning on the parts of real estate investors in the months ahead. As an investor, what do these numbers mean for your real estate investing plan?

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[1] http://money.cnn.com/2011/08/09/real_estate/home_price_recovery/index.htm

[2] http://www.msnbc.msn.com/id/44091488/ns/business-real_estate/#.TkwQ04ImbW4