Not all Recoveries are Created Equal
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Not all Recoveries are Created Equal

By Feux Follets following x   2018 Mar 12, 1:50am 66 views   0 comments   watch   sfw   quote     share    

CoreLogic has been watching for signs of overvalued markets for some time. The company and its lead analysts Frank Nothaft, Molly Boesel, and Sam Khater have produced a special report "Evaluating the Housing Market Since the Great Recession," which plots the path that led to what can fairly be called a mixed recovery.

Starting in December 2007 the country trod a path that, over the next two years, ultimately led to 8.7 million jobs lost, an unemployment rate that peaked at 10 percent, and over $16 trillion in lost household worth. The situation began to turn around in 2010 and over the next seven years the economy grew by 19 percent, added jobs for 88 consecutive months, and saw unemployment drop to 4 percent by the end of 2017.

As the economy recovered, so did the housing market. Home prices, which fell by 33 percent from their 2006 peak before hitting bottom in 2011, have returned to and in many locations surpassed prior peak levels, growing 51 percent from the bottom. The average house price is now 1 percent higher than it was at the peak in 2006, and the average annual equity gain was $14,888 in the third quarter of 2017.

However, the recovery has been anything but even. Boesel says, "With the availability of affordable housing on the decline, an out-of-balance housing supply and demand ecosystem, and geographic shifts in the labor market, home price trends across the country tell a colorful tale of state-to-state economic health."

Among the states that were hardest hit by the home price downturn were six located in the Western region - with peak to trough losses of 32 to 60 percent. These are among those that have experienced the greatest price growth in the recovery. Nothaft says, "Greater demand and lower supply - as well as booming job markets - have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels. "


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