We have spent a lot of our time on this talking about the potential future of the housing market and casting our predictions as we see things forming. Every now and again it is good to take a look back, see how far we’ve come, and assess the future from there. For, those who cannot remember the past are condemned to repeat it. So, prior to the housing market collapse in 2007-2008 the top 20 city markets in the United States reached all-time highs in price per house. We are going to take a look back to see how far we’ve come in these 20 cities so that we can see where our future is to unfold.
Out of the top 20 cities in the country only 2 have seen positive increases since their peak prior to the housing market collapse. Denver and Dallas have reached their all-time peaks in May of this year by barely (and we mean barely) having housing costs rise above where they were pre-collapse. All of the other 18 major cities have seen a decline ranging from 43.2% in Las Vegas to 3.9% in Boston and everywhere in between. The question is, are we making the recovery that everyone thinks we are? While Las Vegas has the longest way to go and Boston has come the furthest next to Dallas and Denver, our beloved Portland falls somewhere in between. Home prices are down 10.4% from where they reached at their peak in July 2007. As we know the damage was much more severe as 2013 saw houses in Portland appreciate by 12.6% of the entire year. Of course, housing appreciation has slowed quite a bit but the market soldiers on. This year Portland is looking at an appreciation value of 4.6% of the year which means that in the next few years houses in Portland will have finally made up for what they lost in the crash.
For investors, looking at the cities that have the highest percentage left to climb before reaching the levels they reached at their peaks shows that there are still MANY good investment properties out there. Housing appreciation in places like Phoenix (-35.8%) and Miami (-34%) offer the biggest return on your investment outside of Las Vegas. So, if you are an investor that doesn’t absolutely fall in love with Portland because of how awesome it is, then these cities are your best bet to make some “easy” money. It is interesting to note that not every market reached their peak at the same time or even within the same year. While Portland saw itself peak in 2007, San Francisco reached its peak in 2006. The important thing to take from this is that the housing market is getting better and it is recovering. Dallas and Denver are already beyond where they were before the housing collapse and many cities are simply a year or two away. Things are progressing toward where they should be. It will simply time a little time and a lot of patience.