Photo: Robert Clark
Despite several consecutive years of solid price growth, the aftershocks of 2008’s financial crisis can still be felt in many of today’s US housing markets.
While home values in many large housing markets have exceeded pre-crisis peaks, many other markets are still struggling to regain their footing five years into the recovery, according to a report released yesterday by the listing site Zillow.
The national median home was $217,300 in June, up 8.3 percent from last year at the same time. This is 8.4 percent above the highest point of the housing bubble.
Of all the homes in the country, just over 50 percent are valued higher now than at their pre-crisis peak level.
In 21 of the country’s 35 largest housing markets, the median home value has now surpassed its bubble peak level. And, in 7 of those markets, more than 95 percent of all homes are worth more today than they were at their peak recorded value during the house boom over a decade ago.
For example, in Denver, CO, the typical home is currently valued at $397,700, which is 65.6 percent higher than its highest point in June 2006. Some 99.6 percent of all Denver homes are now worth more than they were during the bubble — the highest share of all the markets studied by Zillow for the report.
Other markets with large shares of homes worth more today include San Jose, CA (98.7 percent), Austin, TX (98.7 percent), San Antonio, TX (98.8 percent) and Seattle, WA (97.3 percent).
On the other end of the spectrum is Las Vegas, NV, where just 0.8 percent of all homes are worth more today compared to pre-crisis levels.
Zillow Senior Economist Aaron Terrazas says that the Las Vegas market is an example of a market that “got the farthest ahead of itself” price-wise during the boom and subsequently fell the most during the crash.
“For millions of longer-term homeowners, and it may take years of growth for their home to regain the value lost a decade ago,” Terrazas says in the digital release.
Meantime, a low supply of available homes for sale continued to thwart hopeful homebuyers in June. Inventory levels have consistently remained well below historic norms for several consecutive years now and have helped create one of the most competitive housing markets seen in years.
National inventory fell 4.8 percent year-over-year in June, but Zillow notes that the “pace of the decline has slowed considerably.” In June 2017, national inventory fell at an annual rate of 12.3 percent.
And according to a separate recent report by ATTOM Data Solutions, homeowners are staying in their homes longer than ever before, a record-setting 8.9 years. This increase in tenure is directly related to both the housing collapse a decade ago and the current inventory crisis.
“Following the collapse, many homeowners were forced to stay put longer because they did not have enough equity — or had negative equity — to become move-up buyers,” ATTOM president Daren Blomquist tells Livabl.
Blomquist went on to say that home building has been anemic in the recovery, meaning is not an abundance of inventory available for those prospective move-up buyers who’ve now regained positive equity. Worse, many may be staying put due to the psychological scars of the collapse.
“The collapse ingrained in many that the conventional wisdom that home prices always rise is not necessarily true,” Blomquist explains.
Click here to read the entire release.