With the U.S housing bubble far in the rear-view mirror, home prices in most places have passed their pre-recession peak. In other spots, though, it’s a different story.
The chart above compares current home prices to those in May 2007, which is when values peaked nationally and began sliding (some areas hit their exact top at a different point). While the median home price bottomed out in early 2012 and then started climbing upward, prices in some metro areas still remain below where they were 12 years ago.
“Some markets that experienced a huge run-up and then a big downturn are still waiting for a recovery,” said Lawrence Yun, chief economist for the National Association of Realtors. “For some people, the decline from the time they purchased was so severe that it’s taking a long time to recover.”
In Winchester, Virginia, for example, the median home price of $225,000 remains below its March 2006 peak price of $270,900. In Naples, Florida, the median price of $337,100 is less than its July 2006 peak of $457,200.
Nationally, the median national home price is $226,700, according to Zillow. That’s about 13% more than its 2007 peak of $200,500.
Prices have pushed far higher than their previous peaks in some metro areas. For example, in Midland, Texas, the current median of $261,100 is 75% above its May 2008 peak price of $149,300.
For markets where home prices have surpassed their previous peak and continue to rise, local dynamics could contribute to prices moving even higher.
“In places like Dallas and Nashville that are creating jobs faster than the national average and people are coming into those regions, there’s steady demand,” Yun said. “In those markets, I wouldn’t be concerned about buying at the top.
“Homebuyers might not see a sharp run up in prices, but they’d probably see steady increases.”
And while housing inflation has cooled somewhat, affordability issues in some spots — such as New York City and San Francisco — are likely to persist as long as job growth remains and building new homes in already-crowded areas is a challenge.
“Superstar cities will always carry some sort of premium,” Yun said.