The Housing Market’s Recovery Has Been Uneven And Underwhelming

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Only 34 percent of homes have had their value reach their pre-recession peak

May 03, 2017

Homes in Las Vegas. Photo: Andy Morales/Creative Commons

Only 34 percent of homes across the nation have had their value reach their pre-recession peak. At the current rate of recovery, it could still take another eight years for 100 percent of the nation’s homes to surpass the high marks set in the middle of the last decade.

Trulia reports the housing recovery has been uneven, largely depending on which metros have seen the strongest and weakest income growth.

More than 94 percent of homes have reached pre-recession peaks in booming job markets such as Denver, San Francisco, and Oklahoma City. But, in plenty of places, including Las Vegas, Tucson, Ariz., and Fresno, Calif., well less than 5 percent of homes have recovered.

The intuition here is this: housing is what economists call a “normal good,” so when incomes rise, households tend to spend more on housing, which pushes up prices. … Population growth and vacancy rates also matter. This is because an expanding population puts upward pressure on the demand for homes, which pushes up prices. On the other hand, vacant homes act as excess supply, which tends to put downward pressure on prices all else equal.

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