Personal Finance

Uneven housing recovery persists, with some markets still behind their pre-recession peak

Homes stand at the Toll Brothers Bowes Creek Country Club community in this aerial photograph taken over Elgin, Illinois, U.S., on Sept. 26, 2018.
Daniel Acker | Bloomberg | Getty Images
Key Points
  • The median national home price is $226,700, according to Zillow. That's about 13% more than its 2007 peak of $200,500.
  • In other places, however such as Naples, Florida, and Winchester, Virginia, median prices still lag behind their pre-recession highs.
  • Cities like Dallas and Nashville have seen prices push past previous peaks and look set to continue climbing.

With the U.S housing bubble far in the rearview 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 with those in May 2007 — when values peaked nationally and began sliding (some areas hit their exact top at a different point). While the median home price bottomed in early 2012 and then started climbing, 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."

More from Personal Finance:
How to turn your side hustle into a legit business
Homeowner avoided 'energy guzzlers' and it's paying off
Brokers sanctioned in fallout from $1.2 billion Ponzi scheme

In Winchester, Virginia, for example, the median home price of $225,000 remains below its March 2006 peak 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 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.

VIDEO1:2401:24
US existing home sales in March down more than expected

"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.