Apr 03

Markets Still Have Long Way to Recovery

Markets Still Have Long Way to Recovery

Markets Still Have Long Way to Recovery. Image courtesy of renjith krishnan / FreeDigitalPhotos.net

Markets Still Have Long Way to Recovery. Image courtesy of renjith krishnan / FreeDigitalPhotos.net

At the current pace of single-family home values, the full recovery in the housing market may still be about 2.5 years away nationwide, according to a new analysis of housing data by 24/7 Wall St. But in some large metro areas, the full housing recovery may even be a decade away.

24/7 Wall St. recently analyzed home values in 50 of the largest metro areas to determine how long it would take for home values to return to their peak values since the aftermath of the housing crisis and recession.

The markets with the longest recovery periods “probably had more building and sales and home activity in general during the periods of peak values,” says Danielle Hale, director of housing statistics at the National Association of REALTORS®. “Therefore, the legacy of the aftermath of the housing crisis is a little bit sharper in these areas than in other areas.”

Also, some of the reasons for a delayed recovery in some areas has to do with the overall local economy’s performance, Hale adds. In some areas, job growth has yet to catch up to peak levels.

“There’s a really strong relationship between jobs and the overall economic performance and the housing market,” says Hale. “Economic performance as reflected in the jobs numbers is really key to understanding what’s going on in the housing market.”

To identify the housing markets with the longest estimated recovery periods, 24/7 Wall St. reviewed the number of years current home values in the 50 largest metro areas would need to reach their respective peaks at their current annualized growth rate. The following are five areas that are estimated to have some of the longest housing market recoveries:

1. Providence-Warwick, R.I.-Mass.

  • Estimated years to recover: 16.8
  • Percent change peak to trough: -32%
  • Percent change peak to January 2015: -24.4%

2. Detroit-Dearborn-Livonia, Mich.

  • Years to recover: 10.9
  • Percent change peak to trough: -44.6%
  • Percent change peak to January 2015: -24.6%

3. Phoenix-Mesa-Scottsdale, Ariz.

  • Years to recover: 9.7
  • Percent change peak to trough: -47.1%
  • Percent change peak to January 2015: -27.4%

4. Las Vegas-Henderson-Paradise, Nev.

  • Years to recover: 7.9
  • Percent change peak to trough: -58.2%
  • Percent change peak to January 2015: -38.9%

5. Riverside-San Bernardino-Ontario, Calif.

  • Years to recover: 7
  • Percent change peak to trough: -50.5%
  • Percent change peak to January 2015: -30.2%

View the full list of housing markets with the longest road to recovery as well as more about the methodology used in the study at 24/7 Wall St.

Source: “Eight Housing Markets With the Longest Road to Recovery,” 24/7 Wall St. (March 27, 2015)

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