Foreclosed homes appreciating faster than typical properties, report finds
Metro Boston homes that were foreclosed on during the bust are appreciating 7.9 percent year over year, compared with 5.2 percent for all homes.
SEATTLE — The value of homes that were foreclosed on during the Great Recession are appreciating rapidly, up 10.3 percent over the past year, according to a new Zillow analysis, while the typical US home is appreciating 6.5 percent annually.
Throughout the recovery, foreclosed homes have gained 74.5 percent in value, compared with about 46 percent 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 US home.
In metro Boston, the current median value of a previously foreclosed home is $336,500, compared with the overall median value of $451,500. Homes that were foreclosed on during the bust are appreciating 7.9 percent year-over-year, compared with 5.2 percent for all homes, and 62.1 percent of previously foreclosed homes were in the bottom-third of the market. The Boston metro area, according to Zillow, includes Suffolk, Middlesex, Plymouth, and Norfolk counties, in addition to Strafford and Rockingham counties in southern New Hampshire.
While the value of foreclosed homes is quickly appreciating — they finally passed their prerecession 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. And because nearly half of all homes foreclosed on during the bust were low-end, the housing bust widened the gap between the rich and poor in the United States.
During the run-up to the housing bubble, many low-income earners were able to qualify for a mortgage and buy a home. Because of this, the homeownership rate rose from about 65 percent in the mid-1990s to almost 70 percent in 2006. When the housing market crashed in 2007, millions of American homeowners had to walk away from their properties, missing out on the opportunity to gain equity as home values recovered in the years to come.
‘‘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 Aaron Terrazas, Zillow senior economist. ‘‘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.’’
| Metropolitan Area |
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% |
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