CoreLogic Principal Economist Molly Boesel recently took a look at the overall boom and bust cycle for the housing market in 2017. Looking at the length of the decline and how far prices fell, CoreLogic is revealing parallels between the peak levels of the past and the present.
According to Boesel, while 11 years have gone by since the start of the housing crisis in 2006, U.S. home prices are nearly back to the peak level they were at in April of 2006. “After hitting peak in 2006, the national price level fell for five years, finally reaching bottom in March 2011 after falling 33 percent nationally,” Boesel said.
Today, CoreLogic’s data indicates that the U.S. home price index is almost back to those peak levels, but regionally, some locations are still far from it. When considering the U.S. housing crisis home price declines compared to some other historical declines, this is what CoreLogic’s data discovered.
According to Boesel, in the mid-1980’s, Texas experienced an oil bust that caused home prices to fall by 16 percent over three and a half years.
“At that time, Texas home prices took nearly nine years to recover,” Boesel said.
Another example is California’s market in the early 1990s. Boesel noted that “defense and manufacturing job losses” led to home price declines. And after falling by 15 percent over five years, “home prices in California fully recovered after eight years.”
CoreLogic’s data discovered that after peaking in March 2006, prices in Nevada fell 60 percent. After more than 11 years, home prices in Nevada through July 2017 were still 27 percent below the peak level.
“Not all areas saw such deep declines in home prices, and some areas are far above where they were before the start of the housing crisis,” said Boesel. “For example, Colorado hit a peak in the home price index in August 2007, fell by 14 percent over four years, but since then has surpassed the 2007 peak by 42 percent.”
Overall, the insights noted that 34 states, including the District Columbia, have surpassed their pre-crisis home price levels today.
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