Only 8 Percent of Markets Better Off Than Eight Years Ago Before Price Bubble Burst
80 Percent of Markets Better Off Than 2012; 30 Percent Better Off Than 2008
IRVINE, Calif. – March 20, 2014 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released an analysis of housing market health in 410 U.S. counties in two-year increments over the past eight years, finding that 96 percent of county housing markets are better off than they were four years ago when foreclosures peaked in 2010 but only 8 percent of county housing markets are better off than they were eight years ago in 2006 before the housing price bubble burst.
The analysis also found that 80 percent of the county housing markets were better off than two years ago in 2012, when median home prices hit bottom, and 30 percent were better off than six years ago in 2008, at the front-end of the Great Recession.
The analysis looked at four different key categories of housing market health: home price appreciation, affordability, percentage of bank-owned (REO) sales, and the unemployment rate. Each county received a ranking between 1 and 2.5 for each category each year, and those four rankings were summed up for a total index score for a maximum possible score of 10 each year. The 410 counties analyzed in the report account for 63 percent of the U.S. population.
“The housing recovery has taken root in hundreds of counties across the country and almost all local housing markets are better off than they were four years ago when foreclosure activity peaked in 2010, with more than 1 million homes lost to foreclosure in that year alone,” said Daren Blomquist, vice president at RealtyTrac. “We saw less than half that number of bank repossessions nationwide in 2013. Even in hard-hit markets like Stockton, Las Vegas and Lansing, Mich., where REO sales represented more than half of all sales in 2010, the percentage of REO sales has been cut at least in half.”
“The foreclosure-REO business has dramatically decreased since the peak of the crisis in 2010 and is pretty much non-existent in the Lake Tahoe and Reno markets,” said Craig King, COO of Chase International, covering the Reno and Lake Tahoe markets. “Housing inventory is nowhere near the levels of inventory we saw in 2006 before the foreclosure crisis began, because there just isn’t very much listing inventory for buyers in the market right now, but I think we can expect a much stronger spring market.”
"The Denver housing market is healthy and strong, however our historically low inventory is keeping the market from returning back to the normal levels of 2006 before the recession hit.” Chad Ochsner, owner/broker of RE/MAX Alliance, covering the Denver, Colo. market. “Denver and Colorado have come out of the foreclosure crisis for the most part. Colorado was one of the first states to go into the recession and, following suit, we are one of the first ones to come out.”
“Home prices in three-fourths of the counties analyzed are still below 2006 levels, but low inventory has helped home prices accelerate past pre-recession levels in some markets like Seattle, San Francisco, Denver and Oklahoma City,” Blomquist noted. “Those rapid home price gains are causing a concerning drop in affordability rates in some cities, but homebuilders and homeowners with regained equity should help provide more supply to balance out many of those markets in 2014.”
Interactive Heat Map
RealtyTrac created an interactive heat map charting the fall and rise of the housing market, county-by-county over the last eight years. A dropdown in the heat map allows users to see the change in the housing market health index every two years from 2006 to 2014. The heat map can be viewed at the following link, and below is HTML code for embedding the heat map in any website or blog: http://www.realtytrac.com/rnshared/heatmaps/Housing-Market-Health-Index/
<iframe src="http://www.realtytrac.com/rnshared/heatmaps/Housing-Market-Health-Index/" width="680" height="600" scrolling="no" frameborder="0"> Sorry, your browser doesn't support iframes. </iframe>
For this analysis RealtyTrac looked at four different key categories of housing market health: home price appreciation over the previous two years; affordability based on a ratio of median incomes to median home prices; percentage of bank-owned (REO) sales; and unemployment rate. Each county was assigned a score between 1 and 10 for each category and the four category scores were summed up for a total housing health index for each year.
- Home price appreciation: percentage change based on median residential property prices in January of each year compared to the median price two years ago.
- 75% or more = score of 2.5
- 25%-75% = score of 2.0
- 0%-25% = score of 1.5
- -25%-0% = score of 1
- -25% or less = score of 0.5
- Home affordability: median incomes as a percentage of median residential property prices based on annual median household income data from the U.S. Census bureau and median residential property prices from January of each year. Median household income data for 2014 was projected based on trend in previous years.
- 100% or more = score of 2.5
- 75%-100% = score of 2.0
- 50%-75% = score of 1.5
- 20% - 50% = score of 1.0
- 0%-20% = score of 0.5
- Percentage of REO sales: the percentage of all residential property sales that were bank-owned (REO) properties in the 12 months ending in January of each year.
- 0%-10% = score of 2.5
- 10%-20% = score of 2.0
- 20%-30% = score of 1.5
- 30%-45% = score of 1
- 45% or more = score of 0.5
- Unemployment Rate: the average of monthly unemployment rates for each year as reported by the Bureau of Labor Statistics.
- 0%-5% = score of 2.5
- 5%-7% = score of 2.0
- 7%-10% = score of 1.5
- 10%-15% = score of 1
- 16% or more = score of 0.5
Data Licensing and Custom Report Order
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About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the nation’s leading source of comprehensive housing data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac’s wholly-owned subsidiary, Homefacts®. RealtyTrac’s foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.
Jennifer von Pohlmann
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