Truth from Trulia: The Unrecovered Housing Economy

Donald Trump’s rise through the GOP primaries and a surprise victory in November unmasked a deep and widespread angst over the quality of nation’s economic recovery. While national numbers on job growth and income levels have looked encouraging to national journalists and Washington-centric politicians, from the perspective of corner cafes and assembly line floors in heartland states, the picture has not been so rosy.

Even at the national level, income growth has been slower than many realize. Since the downturn began in the fourth quarter of 2007, estimated U.S. personal income has increased by the equivalent of 1.7 percent a year through the third quarter of 2016, compared with the equivalent of 2.8 percent a year over the past 30 years, after accounting for inflation. Income growth is very uneven, from a constant annual rate of less than 1 percent in Illinois and Nevada to almost 5 percent in North Dakota since the start of the Great Recession.[1] Economic rot localized in manufacturing and energy communities flew under the radar of most pollsters, the networks, the Democrats and the national psyche, until election day.

Are we also kidding ourselves about the ubiquity of the nation’s housing recovery just as so many did about the national economic recovery?

Have national trends in the most local of economies, residential real estate, hidden the pain and heartbreak of millions of homeowners who did what they were told, invested in buying a home, and ten years later have virtually nothing to show for it?

While rising prices and values have turned real estate reports from red to black ink, these data hide the 15 to 20 million families that bought of the peak of the boom in 2004 to 2006. Nationally, home prices are still 3.8 percent short of the boom’s April 2006 peak, according to CoreLogic.[2] Owners who bought during the boom and still own their homes are just now becoming whole. They have missed an entire decade of appreciation.

In “The Housing Recovery that Wasn’t”, Trulia’s Ralph McLaughlin points out that:

Nationally, just 34.2% of all homes have recovered to their pre-recession peak value.
Among the largest 100 metros, the share of homes that have recovered range from less than 3% in Las Vegas, Tucson and Fresno, Calif., to over 94% in Denver, San Francisco and Oklahoma City.
Markets with the strongest income growth between December 2009 and January 2017 – such as San Francisco, Seattle and San Jose, Calif., – have seen the largest share of homes pass their pre-

Markets with Least Home Value Recovery
U.S. Metro	% of Homes Recovered to Pre-Recession Peak Value	Median Home Value, March 2017	Median Peak Value, (Date Varies)
Las Vegas, NV	0.6%	$214,630	$306,028
Tucson, AZ	2.4%	$179,194	$236,236
Fresno, CA	2.5%	$217,818	$295,518
Camden, NJ	2.7%	$195,813	$244,536
Lake County-Kenosha County, IL-WI	2.7%	$215,616	$260,850
Fort Lauderdale, FL	2.7%	$227,425	$295,100
Bakersfield, CA	2.9%	$191,435	$276,213
Deltona-Daytona Beach-Ormond Beach, FL	2.9%	$176,654	$238,423
New Haven, CT	3.2%	$221,160	$282,632
Riverside-San Bernardino, CA	3.4%	$323,180	$405,413