An analysis of housing market health in 410 U.S. counties over the past eight years found that 96 percent of the markets are better off than they were four years ago when foreclosures peaked, but only 8 percent are better off than they were eight years ago in 2006 before the housing price bubble burst.
RealtyTrac an Irvine, Calif., housing data firm, conducted the study, which included reviewing markets in two-year increments.
The analysis looked at four 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 the 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 analysis further found that 80 percent of the county housing markets were better off than two years ago, when median home prices hit bottom, and 30 percent were better off than six years ago in 2008, at the front-end of the recession.
"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.
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 added. 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.
Craig King, chief operating officer of Chase International, a real estate company covering the Lake Tahoe and Reno, Nev. markets, said, "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]. Housing inventory is nowhere near the levels of inventory we saw in 2006 before the foreclosure crisis began, because there just isnt very much listing inventory for buyers in the market right now, but I think we can expect a much stronger spring market.
Added Chad Ochsner, owner/broker of RE/MAX Alliance, covering the Denver 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. 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.
To review a heat map of the analysis, click here.