The value of homes that were foreclosed on during the Great Recession are appreciating rapidly, up 10.3% over the past year, according to a new Zillow® analysis, while the typical U.S. home is appreciating 6.5% annually.
Throughout the recovery, foreclosed homes have gained 74.5% in value, compared to about 46% for all homes. This means that homes that were foreclosed on during the housing crisis have made far greater gains in value than the typical U.S. home.
"While the value of foreclosed homes is quickly appreciating – they finally passed their pre-recession peak 10 months earlier than all homes – the people who lost their homes to foreclosure during the housing bust have not benefited from these gains," Zillow said in a press release. "And because nearly half of all homes foreclosed on during the bust were low-end homes, the housing bust widened the gap between the rich and poor in the U.S."
"When the housing market tripped up a decade ago, homes that went into foreclosure fell hard – their value dropping substantially more than homes that didn't experience a foreclosure. But markets will never overlook a deal, and for much of the economic recovery, homes with a history of foreclosure have been a deal. This remains so today, although somewhat less so than a year ago," said Zillow senior economist Aaron Terrazas. "While the overall market is facing growing headwinds, homes that were foreclosed upon during the bust are picking up steam, speaking to the enduring appeal of affordability. For families who lost their homes during the housing bust and were locked out of the market for several years thereafter, this was a critical lost opportunity."
Here are some key findings from the report, which can be found here on Zillow Research:
- Many lower-income households were able to buy homes in the run-up to the housing bubble, causing the homeownership rate to rise from about 65% in the mid-1990s to almost 70% in 2006.
- Of all foreclosed homes, about 45.4% were among the least expensive third of homes. Only 16.9% were among the most expensive third of homes. San Francisco, Bridgeport, Conn., and San Jose, Calif. had the greatest share of foreclosed homes among the bottom-tier.
- Foreclosed homes gained value faster than other homes, and in many markets, are more valuable now than ever before. Since the recovery, foreclosed homes have gained 74.5% in value, while the typical U.S. home has gained just 46%. Also, while appreciation has slowed over the past year for all homes, it has accelerated for foreclosed homes.
- In many cases, investors bought foreclosed homes and converted them into rental properties, benefiting from the recovery as home values bounced back. The%age of single-family homes being rented is up from 2005, but appears to have peaked at 28.4% in 2016. Since 2016 it has fallen to 28.1%.
Metropolitan | Share of | Median Home Value | YoY Median | Median Home Value | YoY Median |
United States | 45.4% | $ 207,000 | 10.3% | $ 216,700 | 6.5% |
New York-Newark-Jersey City, NY | 66.0% | $ 281,800 | 11.1% | $ 426,300 | 4.4% |
Los Angeles-Long Beach-Anaheim, CA | 58.0% | $ 501,200 | 7.1% | $ 641,800 | 5.2% |
Chicago-Naperville-Elgin, IL | 48.5% | $ 175,600 | 6.2% | $ 219,100 | 4.2% |
Dallas-Fort Worth-Arlington, TX | 41.2% | $ 197,500 | 10.5% | $ 229,400 | 9.7% |
Philadelphia-Camden-Wilmington, PA | 56.6% | $ 153,100 | 8.8% | $ 227,200 | 4.2% |
Houston-The Woodlands-Sugar Land, TX | 41.3% | $ 170,800 | 8.6% | $ 198,500 | 5.3% |
Washington-Arlington-Alexandria, VA | 54.2% | $ 317,800 | 5.3% | $ 397,800 | 3.2% |
Miami-Fort Lauderdale-West Palm Beach, FL | 47.8% | $ 235,200 | 10.7% | $ 274,000 | 7.0% |
Atlanta-Sandy Springs-Roswell, GA | 47.2% | $ 168,700 | 12.2% | $ 204,600 | 10.4% |
Boston-Cambridge-Newton, MA | 62.1% | $ 336,500 | 7.9% | $ 451,500 | 5.2% |
San Francisco-Oakland-Hayward, CA | 70.2% | $ 582,800 | 8.8% | $ 947,700 | 9.0% |
Detroit-Warren-Dearborn, MI | 44.4% | $ 111,200 | 18.2% | $ 153,900 | 7.4% |
Riverside-San Bernardino-Ontario, CA | 38.9% | $ 331,100 | 7.8% | $ 356,600 | 5.5% |
Phoenix-Mesa-Scottsdale, AZ | 45.3% | $ 224,600 | 9.1% | $ 254,400 | 6.3% |
Seattle-Tacoma-Bellevue, WA | 55.7% | $ 369,400 | 8.1% | $ 486,800 | 8.2% |
Minneapolis-St. Paul-Bloomington, MN | 49.9% | $ 228,700 | 8.7% | $ 258,900 | 5.4% |
San Diego-Carlsbad, CA | 52.9% | $ 477,700 | 5.3% | $ 580,500 | 4.9% |
St. Louis, MO | 51.5% | $ 114,700 | 6.9% | $ 161,200 | 4.6% |
Tampa-St. Petersburg-Clearwater, FL | 45.2% | $ 181,400 | 10.7% | $ 205,000 | 8.9% |
Baltimore-Columbia-Towson, MD | 49.4% | $ 207,100 | 8.0% | $ 263,300 | 3.9% |
Denver-Aurora-Lakewood, CO | 54.8% | $ 337,500 | 9.3% | $ 396,200 | 6.2% |
Pittsburgh, PA | 52.4% | $ 101,000 | 11.5% | $ 140,200 | 6.1% |
Portland-Vancouver-Hillsboro, OR | 47.8% | $ 344,200 | 6.8% | $ 387,900 | 4.2% |
Charlotte-Concord-Gastonia, NC | 37.4% | $ 173,200 | 11.1% | $ 195,000 | 8.8% |
Sacramento--Roseville--Arden-Arcade, CA | 50.8% | $ 340,000 | 6.0% | $ 397,100 | 4.3% |
San Antonio-New Braunfels, TX | 43.1% | $ 163,900 | 8.1% | $ 184,600 | 4.4% |
Orlando-Kissimmee-Sanford, FL | 42.7% | $ 204,700 | 10.8% | $ 226,300 | 7.9% |
Cincinnati, OH | 56.5% | $ 123,000 | 9.1% | $ 161,000 | 5.4% |
Cleveland-Elyria, OH | 58.9% | $ 88,000 | 6.9% | $ 140,400 | 5.2% |
Kansas City, MO | 50.0% | $ 138,000 | 11.0% | $ 181,300 | 7.5% |
Las Vegas-Henderson-Paradise, NV | 37.8% | $ 252,700 | 15.9% | $ 263,300 | 12.0% |
Columbus, OH | 50.6% | $ 142,800 | 10.2% | $ 180,700 | 6.5% |
Indianapolis-Carmel-Anderson, IN | 46.2% | $ 130,100 | 12.3% | $ 152,700 | 8.1% |
San Jose-Sunnyvale-Santa Clara, CA | 67.4% | $ 837,100 | 17.5% | $ 1,281,100 | 22.7% |
Austin-Round Rock, TX | 56.9% | $ 235,200 | 7.9% | $ 296,300 | 5.3% |
