Sometimes averages don’t tell the entire story. If a Ferrari LaFerrari and a Ford F-150 are parked next to each other, you can point over and say that the average top speed of those two cars is 162 mph. A respectable number, however, what that average doesn’t show you, is that the F-150 on its own only has a top speed of around 110 mph while the LaFerrari can reach speeds in excess of 217 mph. The average isn’t wrong, but it also doesn’t provide an accurate look at either car. The same thing can be said for the U.S. housing market.
On average, a single-family home in the U.S. was worth $249,224 in 2015, which is about 14 percent more than in 2004,The Washington Post reports. Taken at face value, this is a positive, but what about when you start to break it down as with the F-150 and the Ferrari? While the typical value of a single-family home has gained around a little less than 14 percent, homes in the most expensive neighborhoods have gained 21 percent. But where the car analogy fails is that there are not just two housing markets we are looking at. There are hundreds, each one with its own variations in income and geography.
For example, while the average single-family home has grown 14 percent in value since 2004, a quick look at home value growth in four separate cities illuminates the unequal nature at which the housing market has been improving. In the 20002 zip code of Washington, D.C., home values are up 91 percent and in the 28207 zip code of Charlotte, N.C., they are up 33 percent. Both are well above the national average, but even between these cities whose housing markets are doing well, there is a large variance.
Now let’s take a look at two cities on the other end of the national average. Single-family home prices in the 30034 zip code of Atlanta are down 25 percent and prices in the 95202 zip code in Stockton, Calif. are down 40 percent. Each of these four cities plays into the 14 percent average, yet none of them are anywhere near that average.
While some housing markets have already recovered form the housing crash and are moving forward, there are still plenty of residents of places around the country that are trying to dig themselves out.
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