Housing markets in San Jose, CA, San Francisco and Portland, OR, had the biggest post-recession comebacks, in part because of how big a blow the crash dealt there, according to Realtor.com. Grand Rapids, MI, and Provo, UT, rounded out the top five cities to experience the strongest rebounds.
The real estate listing website measured data from the 150-largest U.S. metros, looking at their highest pre-recession home prices and lowest recession pricing and measuring which markets had bounced back the furthest through 2016. Cities with the most robust recoveries tended to host a number of colleges and universities and research centers, and have a young and educated workforce.
The median national home price hit $227,000 in 2016, ahead of the previous peak at $220,400 in 2005 and up 26% from the market’s trough in 2011. Current home prices are at 80% of their peak values.
While only 34.2% of U.S. homes have seen their values surpass their pre-recession highs, cities with strong income growth and rising populations are faring better on the path to recovery. Buoyed by the burgeoning Silicon Valley tech scene, housing markets in the San Francisco Bay Area have made some of the strongest comebacks.
Areas like Grand Rapids, in turn, are seeing improvement on the back of a growing population and expanding employment. The city, which saw its population grow 3.7% from 2010 to 2015, according to the U.S. Census Bureau, made Forbes' list of the top cities for housing investment again in 2017 after topping the list in 2016, posting the lowest prices on the latest ranking.
Corporate relocations across the Midwest and South are one driver of housing activity there. Grand Rapids, for example, welcomed the opening of a 1.8 million-square-foot data center for technology company Switch earlier this year. The $5 billion campus will garner $1.1 million in tax breaks annually, and will hire 1,000 permanent jobs over the course of 10 years, according to WZZM.
Other parts of the Midwest and the South, such as Chicago and Dallas-Fort Worth, TX, will likely continue to see a surge in migration as companies turn to the region for its less-expensive locations. West Coast markets could start to cool as lagging housing inventory and high demand continue to drive up home prices there. The region, according to Realtor.com will likely see sustained price growth, though it could buck the trend as potential buyers and businesses turn to more affordable markets.
For more housing news, sign up for our daily residential construction newsletter.