While various home price indices [1] have reported as of late that rapidly appreciating home prices are still below their peak, in some markets prices have passed their pre-recession highs and continued climbing.
Ranking the rate of recovery for the top 100 metros using the Federal Housing Finance Agency (FHFA)’s Q3 2016 Home Price Index [2], HSH.com found [3] that the most recovered market was Denver, with prices 58 percent above their pre-boom peak. Second on the most recovered list was Austin, Texas, at 54 percent.
Keith Gumbinger, VP of HSH.com, said the highest-ranked markets on the home price appreciation list were there due to a combination of supply and demand, along with other factors such as local economic conditions, employment trends, household formation, and access to credit, among others.
“In general, the most recovered markets had fairly shallow declines in home prices and/or were in areas that saw the economy improving early on—those metros have a lot of energy & tech sector employment, for example,” Gumbinger said. “The markets with the greatest gap yet to recover are harder to generalize, but seem to be in areas that experienced overbuilding of one form or another (California, Florida, Nevada, Arizona markets) or are older industrial areas (New Jersey, Illinois, Connecticut).”
Dallas, Houston, and Fort Worth ranked third through fifth on the list of most recovered markets, with prices 47, 44, and 37 percent higher than their pre-recession peak, respectively. In all, Texas placed four markets in the top five.
Meanwhile, the three of the five “least recovered” markets were in California: Bakersfield was first, with prices still nearly 44 percent below their peak despite home price gains of 49 percent since the recession; Stockton-Lodi was third, with 83 percent appreciation but with prices still 39 percent below their peak; and Fresno was fifth, with prices 34 percent below their peak despite gains of 47 percent.
Rounding out the list of the five markets where prices were furthest below their peak were second-ranked Las Vegas, where prices have appreciated 88 percent since the recession but are still 41 percent off of their peak; and Cape Coral-Fort Myers, Florida, with prices 35 percent lower than their peak despite 78 percent price appreciation since the recession.
“It is important to note that many markets—even the 10 that still remain the furthest from their boom-year price peaks—have seen significant price recoveries since hitting their bottom values,” Grumbinger said. “However, home prices in areas like Las Vegas may have been inflated to such a degree that even when they return to a 'normal' value they may still be well below their previous price peak.”
Click here [3] to view the complete list of 100 metros from HSH.com.
Click here [2] to view the FHFA’s HPI for the third quarter of 2016.