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Which Markets are Still Facing Recovery?

Californians are migrating to Las VegasIn most of the nation’s largest markets, home values have more than recovered from the collapse of the housing market and start of the Great Recession. Most of these markets are in the West and Southwest, with the gains above mid-2000s bubble, but according to Zillow, plenty of other markets are still struggling to recover lost value.

"A decade after the financial crisis it's clear that, just as the bust was felt very differently across the country, so has the recovery,” said Zillow Senior Economist Aaron Terrazas. “Looking back, the housing bust was a rare historical moment when housing markets across the country moved in sync."

While San Jose – the nation's most expensive metro – leads the way with a current median home value of $1.29 million, 74 percent higher than the top of the bubble and more than double its post-crash low, homes in Las Vegas, which have seen some of the steepest gains in the country over the past year, remain 16 percent below their pre-bust median value. Orlando and Chicago home values remain nearly 14 percent below.

Denver follows San Jose with its median value of $397,800 representing a 66 percent increase from the bubble's peak, however, Zillow notes that Denver “never experienced a rapid run-up of prices during the bubble years.” Overall, though, home values in 21 of the nation's largest 35 markets are higher than their pre-recession peaks.

Currently, less than 10 percent of homeowners are underwater on their mortgages, but Zillow notes hat number jumps to the mid-teens in cities such as Chicago and Baltimore.

"While markets like San Jose, San Francisco and Denver have led the country out of the bust and are doing very well – in many cases now dealing with an affordability crisis – plenty of markets continue to bear visible scars from the crash.,” said Terrazas. “Homes that still are worth less than they were a decade ago mean more long-term homeowners remain tethered to underwater mortgages, still struggling to regain that lost value. In the markets that have seen the strongest recoveries, a combination of strong job growth, tight supply and low interest rates have pushed home values upward. But in places that continue to struggle, the stimulus of low mortgage rates is quickly turning to a headwind and the window for a full recovery is quickly closing."

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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