Real estate, as any agent will tell you, is all about location. And so, it turns out, are real-estate busts.
Between 2007-09 and 2010-12, median home values fell in 39 of the 50 largest U.S. metropolitan areas, according to a Census Bureau report released today. Six of the metro areas with the largest declines (in dollar terms) were in California, and two were in Florida. In percentage terms, four of the 10 biggest declines were in Florida and three were in California. Four of the 11 metro areas where median home values actually increased were in Texas.
Perhaps not surprisingly, the priciest metro areas tended to fare the worst. All but one (Raleigh, N.C.) of the 29 metro areas where 2007-09 median home values were above the national median ($191,900) experienced declines in value. Of the 21 metro areas where 2007-09 home values were below the national median, 11 experienced declines and 10 saw gains.
The Census data, drawn from the American Community Survey, come with a few caveats. The three-year study periods were chosen to enable analysis of places with small populations (down to 20,000 people); however, they only roughly coincide with the housing market’s boom and bust. According to the Federal Housing Finance Agency’s monthly index, U.S. home prices peaked in the spring of 2007 and bottomed out in early 2011; housing didn’t begin a sustained recovery until the start of 2012.
Also, the Census data’s home values were based on homeowners’ estimates of how much their property would sell for if it were put on the market, rather than based on actual transactions (as the FHFA and Case-Shiller indices are), and weren’t adjusted for inflation.
Note: An earlier version of this post said 11 metro areas had 2007-09 home values below the national median, not 21.