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US home values have mostly recovered from the Great Recession, with a handful of powerful markets leading the nation’s recovery.
But ten years after the onset of the financial crisis, many homeowners are still waiting to regain the value they lost in the collapse, according to a report released yesterday by the listing site Zillow.
“September 15th marks the 10th anniversary of the collapse of Lehman Brothers, generally considered the start of the Great Recession. And looking back, the housing bust was a rare historical moment when housing markets across the country moved in sync,” writes Zillow senior economist Aaron Terrazas, in a statement.
Nationally, US home prices are now nearly equal to what they would have been had values continued along the pre-bubble trend — without the bubble or subsequent bust.
The median home value nationwide is now almost 9 percent above home values at the height of the housing bubble.
At the metro level, some 21 of the top 35 metros have recovered fully from the financial crisis. San Jose, California and Denver, Colorado have been the fastest to recover.
San Jose, the nation’s most expensive metro, has a current median home value of $1.29 million, 74 percent above pre-crisis peak levels and more than double its post-crash low.
Denver’s median home value of $397,800 is 66 percent above the bubble’s peak. Although, unlike other parts of the country, Denver never experienced a “rapid run-up of prices” during the bubble years.
The Las Vegas, Orlando and Chicago markets have been the slowest to recover. Las Vegas homes remain 16 percent below their pre-crisis median value, while Orlando and Chicago home values remain nearly 14 percent below.
“Las Vegas is actually seeing some of the strongest home value growth, up 14.5% over the last year, but home values there fell so far during the recession and the market saw a high number of homeowners underwater on their mortgages. The market has further to go to fully recover,” Terrazas tells Livabl.
Presently less than 10 percent of homeowners are underwater on their mortgages — that number jumps to the mid-teens in markets like Chicago where the recovery has been slow.
Following the crash, bank lending practices tightened significantly and inventory shrank throughout the country. Since the crash, national building levels have remained well below historic norms.
The national homeownership rate hit an all-time low of 62.9 percent in May 2017, but is starting rise slowly and steadily. It is still down more than four percent from 2006.
Despite current market conditions, Terrezas is confident it is not entering into bubble territory anytime soon.
“We haven’t see the same types of lending that preceded the 2008 crisis and housing remains affordable in most of the country, the handful of pricey coastal markets aside. Home value appreciation should slow over the next year, but the general consensus among experts we recently surveyed is that we won’t see a buyer’s market until 2020,” says Terrezas.
Click here to read the entire report.