Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peaks they reached before the crisis?
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 runs from the first quarter of 1991 and runs through the second quarter of 2018.
It's not news any more that home prices continue to rise at a rapid pace; this has been the case for a number of years now. Three years ago, just 39 markets had seen their prices above boom-time peaks; now, that number is up to 70, and still increasing.
Six new markets joined the ranks of the recovered in the second quarter of 2018, and one slid back underwater after what was an unsustainable bounce above the breakeven line. The six newly recovered metros are:
- Detroit-Dearborn-Livonia, MI (MSAD)
- Jacksonville, FL
- Nassau County-Suffolk County, NY (MSAD)
- New York-Jersey City-White Plains, NY-NJ (MSAD)
- Phoenix-Mesa-Scottsdale, AZ
- Worcester, MA-CT
The market that bounced above par in the first quarter and then backslid in the second was El Paso, TX. It turns out that the 5.7% leap in price from the fourth quarter of 2017 tot he first quarter of 2018 was unsustainable.
It is notable that the Phoenix-Mesa-Scottsdale, AZ metro has now reached recovery. This is a market in one of the so-called "sand states" that was among the hardest hit in the downturn; the area's decline in home values from a 2Q06 peak was more than 52% and at 12 years, recovery has been a long time in the works.
The top 10 "most recovered" markets mostly saw some shuffling of positions, but one notable change: The Honolulu metro market was in a top-10 slot in the first quarter of 2018, but home prices there rose much more slowly than they did in other areas in the second quarter, bumping Honolulu down to #24 in our ranking. Replacing it was the San Antonio-New Braunfels, TX metro area, giving Texas five of the to 10 positions. The Denver-Aurora-Lakewood, CO metro continues to lead the pack, with a current home valuation about 86% above last decade's peak value.
Of course, what these kinds of movements reflect is simple: Home prices some metros are skyrocketing 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.
Some fast moving markets perhaps ready to crowd their way into the top 10 group include the metros of San Jose-Sunnyvale-Santa Clara (CA), Pittsburgh (PA) and Colorado Springs (CO), but to do so will require steady increases at a faster rate than markets just ahead of these.
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 -- still have yet to achieve full recovery. These include Cape Coral-Fort Myers, FL (up 100.73% from bottom), Stockton-Lodi, CA (+112.90%), Las Vegas-Henderson-Paradise, NV (+135.45%) and West Palm Beach-Boca Raton-Delray Beach, Fl (+105.70%). There are a number of other metros where prices have nearly doubled but also where full recovery of values has yet to be reached.
Overall, the group of metros with the largest gap to recovery also mostly saw shuffling of positions, with Bakersfield (CA) sporting the widest gap. The grind toward recovery continues for this group, but with 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 before economic conditions that have supported a long run of firming prices begins to falter. Time will tell, but it may be that some won't make it.
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 Oxnard-Thousand Oaks-Ventura (CA), Providence-Warwick (RI-MA), El Paso (TX) (again), West Palm Beach-Boca Raton-Delray Beach (FL) and Albuquerque (NM). If price trends persist, there is a good chance the percentage of markets at or above previous price peaks with hit 75 before the year ends.
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|
|Dallas-Plano-Irving, TX (MSAD)||172.01||165.17||289.39||68.24%|
|Austin-Round Rock, TX||269.07||259.25||451.24||67.70%|
|San Francisco-Redwood City-South San Francisco, CA (MSAD)||277.11||214.36||458.52||65.46%|
|Fort Worth-Arlington, TX (MSAD)||168.96||160.88||269.77||59.67%|
|Houston-The Woodlands-Sugar Land, TX||200.45||193.84||313.08||56.19%|
|Buffalo-Cheektowaga-Niagara Falls, NY||146.42||145.95||206.95||41.34%|
|Seattle-Bellevue-Everett, WA (MSAD)||298.01||204.77||421.12||41.31%|
|San Antonio-New Braunfels, TX||215.53||199.41||299.18||38.81%|
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 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.
For example, despite more than a 135 percent rise from the metro's lowest value (a figure reached in the fourth quarter of 2011), there is still a gap of over 13 percent yet to go in the Las Vegas 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, too.
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 second 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|
|Camden, NJ (MSAD)||224.20||163.98||184.75||21.35%|
|Cape Coral-Fort Myers, FL||317.53||132.11||265.19||19.74%|
|New Haven-Milford, CT||201.86||153.84||171.24||17.88%|
|Las Vegas-Henderson-Paradise, NV||268.98||100.84||237.43||13.29%|
|Elgin, IL (MSAD)||202.46||130.42||179.92||12.53%|
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)||287.99||197.19||321.94||n/a||11.79%|
|Atlanta-Sandy Springs-Roswell, GA||199.74||139.86||252.64||n/a||26.48%|
|Baton Rouge, LA||229.12||213.56||271.44||n/a||18.47%|
|Boise City, ID||297.06||163.4||373.35||n/a||25.68%|
|Boston, MA (MSAD)||269.95||222.72||312.8||n/a||15.87%|
|Cambridge-Newton-Framingham, MA (MSAD)||257.85||213.85||311.81||n/a||20.93%|
|Charleston-North Charleston, SC||285.77||203.82||374.37||n/a||31.00%|
|Chicago-Naperville-Arlington Heights, IL (MSAD)||238.3||159.74||217.62||9.50%||n/a|
|Colorado Springs, CO||260.01||214.68||353.3||n/a||35.88%|
|Detroit-Dearborn-Livonia, MI (MSAD)||207.98||112.94||208.38||n/a||0.19%|
|El Paso, TX||195.39||169.16||193.38||1.04%||n/a|
|Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (MSAD)||352.52||177.68||338.53||4.13%||n/a|
|Gary, IN (MSAD)||186.16||157.25||206||n/a||10.66%|
|Grand Rapids-Wyoming, MI||185.53||139.58||245.03||n/a||32.07%|
|Greensboro-High Point, NC||168.17||144.9||188.13||n/a||11.87%|
|Hartford-West Hartford-East Hartford, CT||173.49||145.13||155.51||11.56%||n/a|
|Honolulu ('Urban Honolulu'), HI||195.88||173.71||250.17||n/a||27.72%|
|Kansas City, MO-KS||201.18||165.05||254.02||n/a||26.27%|
|Lake County-Kenosha County, IL-WI (MSAD)||209.04||139.7||186.5||12.09%||n/a|
|Little Rock-North Little Rock-Conway, AR||191.16||181.69||211.08||n/a||10.42%|
|Los Angeles-Long Beach-Glendale, CA (MSAD)||277.33||166.59||298.49||n/a||7.63%|
|Louisville/Jefferson County, KY-IN||200.52||186.95||254.54||n/a||26.94%|
|Miami-Miami Beach-Kendall, FL (MSAD)||419.6||214.64||396.68||5.78%||n/a|
|Milwaukee-Waukesha-West Allis, WI||236.18||190.33||256.23||n/a||8.49%|
|Minneapolis-St. Paul-Bloomington, MN-WI||264.71||189.43||292.21||n/a||10.39%|
|Montgomery County-Bucks County-Chester County, PA (MSAD)||213.62||184.27||223.15||n/a||4.46%|
|Nassau County-Suffolk County, NY (MSAD)||302.06||237.95||308.22||n/a||2.04%|
|New Orleans-Metairie, LA||264.65||223.08||304.61||n/a||15.10%|
|New York-Jersey City-White Plains, NY-NJ (MSAD)||272.58||218.38||273.11||n/a||0.19%|
|Newark, NJ-PA (MSAD)||267.98||206.88||251.3||6.64%||n/a|
|North Port-Sarasota-Bradenton, FL||344.47||161.98||321.5||7.14%||n/a|
|Oakland-Hayward-Berkeley, CA (MSAD)||308.87||163.35||359.57||n/a||16.41%|
|Oklahoma City, OK||201.59||192.52||258.73||n/a||28.34%|
|Omaha-Council Bluffs, NE-IA||201.33||181.05||255.71||n/a||27.01%|
|Oxnard-Thousand Oaks-Ventura, CA||284.71||172.43||284.27||0.15%||n/a|
|Philadelphia, PA (MSAD)||239.75||205.23||278.87||n/a||16.32%|
|Riverside-San Bernardino-Ontario, CA||274.16||127.99||248.97||10.12%||n/a|
|Salt Lake City, UT||354.26||262.02||459.2||n/a||29.62%|
|San Diego-Carlsbad, CA||298.58||189.28||325.99||n/a||9.18%|
|San Jose-Sunnyvale-Santa Clara, CA||289.12||198.65||398.45||n/a||37.81%|
|Silver Spring-Frederick-Rockville, MD (MSAD)||279.82||206.75||263.44||6.22%||n/a|
|St. Louis, MO-IL||212.03||174.01||232.6||n/a||9.70%|
|Tacoma-Lakewood, WA (MSAD)||296||182.14||353.75||n/a||19.51%|
|Tampa-St. Petersburg-Clearwater, FL||326.59||313.53||326.59||n/a||4.17%|
|Virginia Beach-Norfolk-Newport News, VA-NC||274.92||207.01||252.13||9.04%||n/a|
|Warren-Troy-Farmington Hills, MI (MSAD)||206.65||123.57||228.88||n/a||10.76%|
|Washington-Arlington-Alexandria, DC-VA-MD-WV (MSAD)||284.28||205.19||299.93||n/a||5.51%|
|West Palm Beach-Boca Raton-Delray Beach, FL (MSAD)||322.87||155.01||318.86||1.26%||n/a|
|Wilmington, DE-MD-NJ (MSAD)||216.7||164.9||195.55||10.82%||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