The housing sector's recovery continues to march forward, but more evidence suggests it's mostly the top tier of the market that's seeing all the benefits.
Taking data from its monthly home price tracker, Black Knight Financial Services found in its latest report that while high-value properties in the country's hardest-hit states have made solid strides in recovering to their pre-crisis peaks, low-value homes are still struggling to make progress.
"We looked at [Home Price Index] appreciation from pre-crisis peaks to today in the 10 states currently trailing the further behind their pre-crisis housing maximums," said Trey Barnes, SVP of loan data products at Black Knight. "The data showed a clear difference in the levels of recovery among home price tiers."
One of the best examples of Black Knight's findings is Nevada, which suffered more than most states in the crash and is still 39 percent off its pre-crisis peak. According to the company, properties in the lowest 20 percent of the state’s housing market are down 47 percent from their peaks compared to 36 percent for the highest tier.
California is even worse: Properties in the Golden State's highest level are about 3 percent from their previous highs, while those at the bottom are still off by nearly one-third.
Most of the difference in performance comes back to the fact that higher-value homes already had an advantage when the recovery started: They weren't hit as badly when prices turned south, according to Barnes.
"In many cases, these disparities between price tiers can be attributed to the fact that during the bubble, lower-tier properties appreciated at much higher rates than higher-valued properties and likewise fell harder and further when the bubble broke," he said.
Price recovery isn't the only area in which the lower-tier market has struggled.
Last week, CoreLogic revealed that while improvements in home equity have pushed nearly nine in 10 properties out of underwater status, most of those gains have been at the high end of the market, with 94 percent of homes valued at more than $200,000 in positive equity. By comparison, 95 percent of properties below that line are right-side up on their loan.
Meanwhile, Zillow reported in November that the inventory of for-sale homes in the most affordable price tier was up only 68.3 percent over the year. That compares to an increase of 82.2 percent in the highest tier.
"Even as conditions improve for buyers overall, it remains a tough row to hoe for first-time buyers and lower-income buyers, especially compared to their more well-off contemporaries," said Zillow Chief Economist Dr. Stan Humphries.