Even after years have passed since last decade's boom and bust, at least some homeowners in 27 major metropolitan have not yet seen their homes recover peak values reached during the previous boom. The good news is that as home prices rise, these unlucky homeowners are dwindling in number.
HSH.com’s Home Price Recovery Index uses the Federal Housing Finance Agency's (FHFA) Home Price Index as a basis to determine which housing markets have fully recovered (or more) and which still lag behind the housing recovery. The time period represented begins with the first quarter of 1991 and runs through the third quarter of 2019.
Home prices continue to rise, trimming the number of metropolitan areas that have yet to see all homes returned to previous peak values. This has been the case for a number of years now; three years ago, only 39 markets had seen their prices above boom-time peaks. That number is now up to 73, and still increasing.
Three new markets joined the ranks of the recovered in the third quarter of 2019:
- Oxnard-Thousand Oaks-Ventura, CA
- Providence-Warwick, RI-MA
- West Palm Beach-Boca Raton-Delray Beach, FL (MSAD)
The top 10 "most recovered" markets mostly saw some shuffling of positions, but there was one notable change, as the San Jose-Sunnyvale-Santa Clara, CA metro area saw prices rise quickly enough to move into the number 10 position, bumping the Seattle-Bellevue-Everett, WA (MSAD out of the most recovered group.
Although the Denver-Aurora-Lakewood, CO metro still holds the top slot, Texas markets dominate the most recovered group, holding five of the 10 slots. California now has two areas included, both around the Bay area and Silicon Valley, and Nashville, TN and Buffalo NY markets round out the group. To reach this echelon, these metros now see home prices some 43% to 88% above the last housing boom's peak levels.
Of course, these kinds of movements reflect is simple: Home prices some metros have been climbing strongly year after year. A rising home price tide may be lifting all boats, so to speak, but some metropolitan boats are perched atop higher waves than are others, or are catching faster-moving tides at the moment.
Rising prices continue to improve the fortunes of homeowners in all markets even as these present challenges to home affordability for buyers. In some markets, the improvement is more stark than others, and even in some of the most challenged markets and those with the greatest chasm to fill from last decade's peak prices have made great strides in closing these gaps.
For example, it is astounding to think that there are four metro areas where home values have climbed by more that 100 percent -- that is, more than doubled their low-water mark values -- but still have yet to achieve full recovery. These include Cape Coral-Fort Myers, FL (up 102.01% from bottom), Stockton-Lodi, CA (+115.44%), Las Vegas-Henderson-Paradise, NV (+144.05%) and the Sacramento-Roseville-Arden-Arcade, CA region (+100.14%). Perhaps as remarkable is that despite these massive increases, two of these (Cape Coral and Stockton) remain in our group with the biggest price chasm yet to fill.
Overall, the group of metros with the largest gap to recovery also mostly saw shuffling of positions, with Bakersfield (CA) sporting the widest gap again. Notably, and for the first time since we began this series, the Las Vegas-Henderson-Paradise, NV achieved escape velocity, with strong price gains seeing one of the poster-child markets for the housing boom and bust climb out of the bottom 10 markets. It's exit left a slot to fill, and the Lake County-Kenosha County, IL-WI metro move into to fill it with about an 11.5% gap yet to fill in.
The grind toward recovery continues for this group; only the Bakersfield metro remains with greater than a 20% price gap yet to recover. However, with home price gains starting to cool, and some prominent economists expecting that the next economic recession may begin in 2020, it may be a race against time to see if full recovery will occur in these places. Time will tell, but it may be that some won't make it, as metros such as New Haven-Milford, CT may take as many as five more years to fully recover, and that only if the pace of home price increases continues at the same rate as did over the last year.
That said, our "nearly recovered" group contains those areas with current values only about one or two percent below previous highs and who are likely to be next in line to hit "fully recovered" in the next quarter or so. These markets include El Paso (TX), Albuquerque (NM), Orlando-Kissimmee-Sanford (FL) and Sacramento-Roseville-Arden-Arcade, (CA). When they do make it, the Orlando and Sacramento markets will have overcome bust-era price declines of more than 50%. Only the Phoenix-Mesa-Scottsdale, AZ and West Palm Beach-Boca Raton-Delray Beach, FL areas have overcome gaps that large to date.
Although we are starting to see some reports that home price gains are cooling, they should be strong enough for a while to push more markets into fully-recovered territory as the year comes to a close.
Of course, we only review trough-to-peak for each market in our evaluation, so your local experience in price changes will of course be different. To see what's happened with home prices during the time you've owned your home, check out our home value estimator, MyHPI. To see where you are in your mortgage, use our mortgage amortization calculator. The combination of price increase and your retirement of the amount you owe may see with a larger equity stake than you think.
10 metro areas that have recovered the most
|Metro Name||Peak Value||Bottom Value||Current Value||Amount Above Peak|
|Austin-Round Rock, TX||268.99||259.21||464.15||72.55%|
|San Francisco-Redwood City-South San Francisco, CA (MSAD)||277.07||213.92||467.96||68.90%|
|Dallas-Plano-Irving, TX (MSAD)||171.84||165.01||289.57||68.51%|
|Fort Worth-Arlington, TX (MSAD)||168.89||160.91||269.97||59.85%|
|Houston-The Woodlands-Sugar Land, TX||200.39||193.91||314.71||57.05%|
|San Antonio-New Braunfels, TX||215.41||199.22||311.20||44.47%|
|Buffalo-Cheektowaga-Niagara Falls, NY||146.18||145.74||209.93||43.61%|
|San Jose-Sunnyvale-Santa Clara, CA||289.07||198.48||414.45||43.37%|
10 metro areas that have recovered the least
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. However, home prices in areas like Bakersfield, CA 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.
For example, despite more than a 115 percent rise from the metro's lowest value (a figure reached in the fourth quarter of 2011), there is still a gap of over 17 percent yet to go in the Stockton-Lodi (CA) metro. There are plenty of other markets with a similar tale to tell, and places where the home price recovery is happening at a much slower pace.
It's important to note that even in markets that have not yet returned to previous peaks, it's not as though borrowers have no equity in their homes. Underwater or no- or low-equity situations might only exist for a relatively small slice of properties purchased during peak pricing times of last decade's boom.
For example, if someone purchased a home in the Sacramento, CA metro area before the second quarter of 2005, our calculations suggest that the value of your home has recently risen to or is now slightly above its original purchase price. This is also the case if the home was purchased when prices had begun to decline, in this case after the first quarter of 2006. In this metro, only homes purchased in this one-year window have yet to reclaim their original purchase value.
In either case, years of making regular payments should also by now given the homeowner a considerable equity stake. In the case of a home purchased in early 2005 (and assuming no refinance of the mortgage) the homeowner would have paid off about 24 percent of their original loan balance by now; for a home purchased early in 2006, about 27 percent of the loan amount will have been retired by now. This calculation doesn't include any downpayment the homeowner may have made, so the equity stake would be increased by that amount. In the case of a pre-2Q05 purchase, the homeowner would likely have a minimum 32 percent equity stake.
Similar experiences should be seen in other markets, too. Also, as home prices generally continue to increase over time, this "yet unrecovered time period" will continue to narrow. For example, in Sacramento, this time period has shrunk by six quarters over the last year alone.
|Metro Name||Peak Value||Bottom Value||Current Value||% Needed to Regain Peak|
|New Haven-Milford, CT||201.89||153.52||169.44||19.15%|
|Cape Coral-Fort Myers, FL||317.45||132.16||266.97||18.91%|
|Camden, NJ (MSAD)||224.08||163.83||190.82||17.43%|
|Elgin, IL (MSAD)||202.68||130.66||180.32||12.40%|
|Lake County-Kenosha County, IL-WI (MSAD)||209.05||139.70||187.50||11.49%|
How has the value of YOUR home changed?
Neither most nor least: 80 more metro areas
Here's a look at the remaining 80 metro areas from the FHFA's HPI list.
|Metro Name||Peak Value||Bottom Value||Current Value||% Needed to Regain Peak||Amount Above Peak|
|Anaheim-Santa Ana-Irvine, CA (MSAD)||287.98||197.17||321.24||n/a||11.55%|
|Atlanta-Sandy Springs-Roswell, GA||199.83||139.92||260.54||n/a||30.38%|
|Baton Rouge, LA||229.01||213.67||275.34||n/a||20.23%|
|Boise City, ID||296.97||163.31||391.57||n/a||31.86%|
|Boston, MA (MSAD)||269.8||222.46||316.04||n/a||17.14%|
|Cambridge-Newton-Framingham, MA (MSAD)||257.54||213.49||314.24||n/a||22.02%|
|Charleston-North Charleston, SC||285.54||203.3||374.54||n/a||31.17%|
|Chicago-Naperville-Arlington Heights, IL (MSAD)||238.07||159.67||219.4||8.51%||n/a|
|Colorado Springs, CO||259.83||214.96||356.56||n/a||37.23%|
|Detroit-Dearborn-Livonia, MI (MSAD)||207.87||113||210.94||n/a||1.48%|
|El Paso, TX||195.55||168.84||194.05||0.77%||n/a|
|Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (MSAD)||352.32||177.37||341.14||3.28%||n/a|
|Gary, IN (MSAD)||186.16||157.44||212.45||n/a||14.12%|
|Grand Rapids-Wyoming, MI||185.39||139.4||248.78||n/a||34.19%|
|Greensboro-High Point, NC||168.01||144.5||190.47||n/a||13.37%|
|Hartford-West Hartford-East Hartford, CT||173.37||145.08||157.42||10.13%||n/a|
|Honolulu ('Urban Honolulu'), HI||195.44||173.59||244.58||n/a||25.14%|
|Kansas City, MO-KS||201.03||164.99||256.18||n/a||27.43%|
|Las Vegas-Henderson-Paradise, NV||268.77||100.46||245.62||9.43%||n/a|
|Little Rock-North Little Rock-Conway, AR||191.18||181.37||212.02||n/a||10.90%|
|Los Angeles-Long Beach-Glendale, CA (MSAD)||277.27||166.72||301.79||n/a||8.84%|
|Louisville/Jefferson County, KY-IN||200.63||187.08||258.15||n/a||28.67%|
|Miami-Miami Beach-Kendall, FL (MSAD)||419.67||214.4||401.56||4.51%||n/a|
|Milwaukee-Waukesha-West Allis, WI||236.09||189.93||257.26||n/a||8.97%|
|Minneapolis-St. Paul-Bloomington, MN-WI||264.54||189.29||296.58||n/a||12.11%|
|Montgomery County-Bucks County-Chester County, PA (MSAD)||213.52||184.05||226.79||n/a||6.21%|
|Nassau County-Suffolk County, NY (MSAD)||302.13||237.96||312.33||n/a||3.38%|
|New Orleans-Metairie, LA||264.82||223.16||308.98||n/a||16.68%|
|New York-Jersey City-White Plains, NY-NJ (MSAD)||272.41||218.01||272.83||n/a||0.15%|
|Newark, NJ-PA (MSAD)||267.94||206.96||256.06||4.64%||n/a|
|North Port-Sarasota-Bradenton, FL||344.1||161.82||323.16||6.48%||n/a|
|Oakland-Hayward-Berkeley, CA (MSAD)||308.95||163.31||362.53||n/a||17.34%|
|Oklahoma City, OK||201.61||192.6||258.74||n/a||28.34%|
|Omaha-Council Bluffs, NE-IA||201.19||180.81||257.72||n/a||28.10%|
|Oxnard-Thousand Oaks-Ventura, CA||284.73||172.59||285.31||n/a||0.20%|
|Philadelphia, PA (MSAD)||239.71||204.59||284.37||n/a||18.63%|
|Riverside-San Bernardino-Ontario, CA||274.24||127.86||254.14||7.91%||n/a|
|Salt Lake City, UT||354.17||261.96||465.75||n/a||31.50%|
|San Diego-Carlsbad, CA||298.73||188.94||328.51||n/a||9.97%|
|Seattle-Bellevue-Everett, WA (MSAD)||297.89||204.48||424.27||n/a||42.43%|
|Silver Spring-Frederick-Rockville, MD (MSAD)||279.78||206.4||271.19||3.17%||n/a|
|St. Louis, MO-IL||211.92||173.75||237.59||n/a||12.11%|
|Tacoma-Lakewood, WA (MSAD)||295.95||182.47||360.06||n/a||21.66%|
|Tampa-St. Petersburg-Clearwater, FL||313.41||170.9||329.63||n/a||5.18%|
|Virginia Beach-Norfolk-Newport News, VA-NC||274.56||206.89||249.59||10.00%||n/a|
|Warren-Troy-Farmington Hills, MI (MSAD)||206.56||123.46||233.5||n/a||13.04%|
|Washington-Arlington-Alexandria, DC-VA-MD-WV (MSAD)||284.07||205.01||300.15||n/a||5.66%|
|West Palm Beach-Boca Raton-Delray Beach, FL (MSAD)||323.12||154.71||331.2||n/a||2.50%|
|Wilmington, DE-MD-NJ (MSAD)||216.71||165.5||199.37||8.70%||n/a|
More about the HPI
The Home Price Index is a broad measure of the movement of single-family house prices. It has been published by the Federal Housing Finance Agency and precursor agencies since the fourth quarter of 1995.
For each market, the index uses 1990 home prices as a basis. Those dollars are "normalized" to a value of 100 for each market; that is, regardless of the actual dollar cost, the index value for a given market becomes 100. For example, a home price in Allentown, PA in 1990 might have been $65,000; this becomes a base value for Allentown of 100, and changes since then are presented as percentage changes from that initial 100 value.
The HPI is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The HPI does not include property transactions backed by FHA, VA, USDA or non-conforming (i.e. jumbo) mortgages.
The HPI is updated each quarter as additional mortgages are purchased or securitized by Fannie Mae and Freddie Mac.
The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinances on the same properties.
The HPI shows the relative change in prices in a metropolitan area from quarter to quarter or period to period. HSH.com has pulled out information from each area to show the amount of change from 1990 to the pre-housing-crisis peak, the low achieved during or after the peak, and how much improvement has taken place since that near-term bottom.
The FHFA uses the revised Metropolitan Statistical Areas (MSAs) and Divisions as defined by the Office of Management and Budget (OMB) in February 2013 (and revised in July 2015 and August 2017, and April 2018). If specified criteria are met and an MSA contains a single core population greater than 2.5 million, the MSA is divided into Metropolitan Divisions.
For more details on the HPI and how it is put together, see http://www.fhfa.gov/Media/PublicAffairs/Pages/Housing-Price-Index-Frequently-Asked-Questions.aspx