A Closer Look at the CoreLogic Special Report
The housing market has gone through historical fluctuations over the past 12 years. The latest Special Report from CoreLogic chronicles the housing price index (HPI), beginning with the pre-crash peak years, through the market correction during the recession, up to December 2017.
During this period, the U.S. economy lost over 8.7 million jobs and the housing market fell 33 percent. As the market has largely recovered and housing prices are increasing throughout the country, now is a good time to look back and evaluate how the market reacted, changed and improved.
The national HPI peaked in April 2006, reaching its maximum decline in March 2011 before returning to peak in October 2017. Of all 50 states, Nevada experienced the biggest drop during the recession, with a 60 percent decline in home prices (Figure 1). Even after a 93 percent increase from its trough-to-current home price level, Nevada’s growth rate is still 23 percent below its pre-recession peak, and 9 percent of mortgaged properties are still underwater. This is one of the highest negative equity levels in the country, exceeded only by Louisiana which fell by just 9 percent during the crash.
During the recession, both Arizona and Florida prices dropped considerably to 51 percent and 50 percent below their respective peaks, and as of December 2017 they remained 16 percent below their peak price. Meanwhile, California experienced a 42 percent decline in home prices. Homes in this market have since recovered and now stand 2 percent higher than they did before the recession.
North Dakota had a shallow 2 percent peak-to-trough price decline during the recession, and with the energy boom, home prices have risen 48 percent above the prior peak in July 2008. While Nebraska and Iowa have experienced less significant growth rates, the numbers in these states tell a similar tale. Home prices in Nebraska dropped only 5 percent from the July 2006 peak, and have since experienced a healthy 27 percent increase from the lowest home price level. Iowa home prices also dropped by 5 percent from their peak and now stand 15 percent above the prior peak in 2006. However, the equity gain in these states is still below the national average of $14,888, standing at $7,720 for Iowa, $8,344 for North Dakota and $8,054 for Nebraska from the third quarter of 2016 to the third quarter of 2017.
Recovery has varied from state to state, and certain states are still not back to their respective pre-recession price levels. The West Coast states experienced significant price dips, but have since rebounded, while energy boom states in the middle of the country experienced comparably shallow drops and prices have risen considerably. To read more, download the free report, Evaluating the Housing Market Since the Great Recession.
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