Steady home price growth has driven property values to their highest levels since before the housing bubble in more than a quarter of U.S. housing markets, even in the most hard-hit regions, according to new data from Zillow.
In February, home values rose 4.3% year-over-year, bringing the national Zillow Home Value Index to $184,600. While this price is 5.9% below the record median home value set in mid-2007, median home values in 26% of U.S. housing markets are currently worth more than they have ever been, indicating these markets are close to a full recovery, according to the February Zillow Real Estate Market Reports.
Zillow spotlights markets in the South, especially Texas and Tennessee, which have joined Western housing markets in surpassing their previous median home value highs.
Markets setting new records in February included Dallas, which climbed 13.7% in February to a median value of $180,700; Louisville, Ky., which increased 13.2% to $146,100; and Nashville, where homes rose 9.5% to a median value of $189,100.
Meanwhile, housing markets in other regions also saw big gains in February that exceeded their previous record highs, including Denver, which reported a 14.5% year-over-year increase to $326,300; Portland, Ore., which posted a 13.4% gain to $315,800; and San Jose, Calif., where prices rose 11.4% to a median value of $938,700.
“These new records mean we’re no longer making up ground lost during the housing recession—we’re laying a new path forward, based on demand for housing and economic growth throughout the economy,” said Zillow Chief Econoist Dr. Svenja Gudell, in a written statement.
As some housing markets reach new peaks, some major U.S. cities remain well-below their previous record-highs, including Las Vegas, which was among the most hard-hit markets following the housing bubble bust. In February, Vegas home values rose 9% year-over-year to $201,900, which is 33.8% below its all-time high, according to Zillow’s analysis.
Of the top-35 metros analyzed by Zillow, Florida’s markets of Orlando and Tampa were also among the farthest from their previous record-high home prices at -29.5% and -25.3% below their al-time highs, respectively.
But while new price heights indicate that some markets are returning to a full recovery, Zillow warns that record-high prices, combined with low inventory, make it difficult to buy a home in many markets.
“In some markets, these new highs are a return to normalcy,” Gudell added. “The fact that other markets are still off by double digits may not mean those markets are far from being recovered. It just highlights how extraordinarily inflated home values had been during the housing bubble.”
Written by Jason Oliva