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California’s Role in the National Housing Recovery

The housing market has come a long way from its lowest point recorded in 2012, regaining $10.9 trillion in value over the past six years, according to a study by Zillow [1].

The market, which was worth a cumulative $33.3 trillion in 2018 is now worth $4 trillion more than what it was at the peak of the housing bubble, the study [2] revealed. On a year-over-year basis, the market gained $1.9 trillion in value over 2017.

Of all the markets across the country, one state accounted for nearly one-third of the value gained during the nationwide housing recovery—California. The report indicated that the housing market in the Golden State grew by $3.7 trillion since early 2012, making it the only state that gained more than $1 trillion in value since the market fell.

Despite coming in a close second in terms of dollar contribution to the national housing recovery (a contribution of $937.9 billion, or 8.6 percent of the overall recovery), "the total value of all the homes in Florida is still $263.9 billion below its peak level," the study indicated.

"Seen from the rearview mirror, 2018 was a year of unusually strong, stable home value growth across the country," said Aaron Terrazas, Senior Economist Zillow. "But cracks in the foundation are clearly starting to emerge. During the second half of the year, appreciation slowed sharply in the priciest corners of the country while it picked up in affordable hotspots. Periods of stability often precede periods of instability, and the outlook for 2019 is certainly both cloudier and blurrier than the outlook a year ago."

Breaking down the growth in home values even further, the study stated that the New York/New Jersey area was the single most valuable metro worth $3 trillion, or 9.1 percent of the national housing market. Four California markets–Los AngelesSan FranciscoSan Jose, and San Diego–were among the 10 most valuable metros in the country.