Between December 2007 and June 2009, U.S. households lost over $16 trillion in net worth. That’s one of the stark figures that opens CoreLogic’s new special report entitled “Evaluating the Housing Market Since the Great Recession.” The report tracks the timeline of events that led up to the housing bubble, the Great Recession, and the decade-long recovery that still continues to this day. How far has that recovery come? “After falling 33 percent during the Recession, housing prices have returned to peak levels, growing 51 percent since hitting the bottom of the market,” states the report. “The average house price is now 1 percent higher than it was at the peak in 2006, and the average annual equity gain was $14,888 in the third quarter of 2017.”
However, that recovery has not unfolded equally in all corners of the nation. “With the availability of affordable housing on the decline, an out-of-balance housing supply and demand ecosystem, and geographic shifts in the labor market, home price trends across the country tell a colorful tale of state-to-state economic health,” says Molly Boesel, Principal Economist at CoreLogic.
According to CoreLogic’s national Home Price Index, Nevada experienced the largest drop in home prices during the Recession, plummeting 60 percent. In spite of having experienced a 93 percent increase to reach the current level, Nevada home prices are still 23 percent below the peak they reached prior to the Recession. Moreover, 9 percent of mortgaged properties in Nevada are currently underwater. Other states that experienced the largest drop in home prices during the Recession include Arizona, Michigan, California, and Idaho.
California has also rebounded impressively, with home prices soaring 78 percent over their lowest point, but like many regions, this has caused problems with affordability. California is also among several Western states that have also shown strong appreciation over the past five years, with Washington home prices up 57 percent during that period and Oregon showing a 54 percent increase.
According to CoreLogic’s report, during November 2006, 67 percent of the most populated metro areas in the U.S. were overvalued, with 32 percent considered “at value” and 1 percent undervalued. As of December 2017, only 33 percent of the most populated U.S. metro areas are considered overvalued, 35 percent are “at value,” and 32 percent are undervalued.
Sam Khater, Deputy Chief Economist at CoreLogic, says, “Since the economic expansion began in 2011, the recovery in home prices has been inconsistent across metro areas, with the CBSAs falling into three broad categories. Growing metro areas, like Denver and Seattle, are experiencing strong home price gains, relative to their respective former peaks, reflecting their strong underlying economies. Boom and bust metro areas, like Las Vegas, have experienced large home price declines and strong recoveries, yet home prices are still below their former peaks. Lastly, other metro areas, like Chicago, are experiencing weak home price growth, reflecting tepid economic and demographic patterns.”
You can dive into the rest of CoreLogic’s data by checking out the full report here.