For Some Parts of Country, Housing Recovery Still Patchy

The housing market, in fits and starts, has reached its most productive levels since bottoming out in 2012. But for some cities, recovery is a matter of geography and income.

A recent report by the Joint Center on Housing Studies at Harvard University, by research assistant Alex Hermann, found that increases in home prices that have occurred since the Great Recession not only vary across the nation’s metropolitan areas, they also vary within many metros as well.

The report examined two cities, San Francisco and St. Louis. It said the San Francisco metropolitan area, where home values are now 16 percent above their pre-recession peak, and the St. Louis metropolitan area, where home values are still 10 percent below their pre-recession peak, illustrate these variations.

The report noted in both areas, median home prices in low-income Zip Codes are less likely to exceed mid-2000 peaks than median prices in high- and moderate-income Zips. However, the regions vary when looking at the changes in house prices between 2000 and 2016. Over that time period, the percentage increase in median prices in the Bay Area’s low-income Zips was greater than the increases in high- and moderate-income ones.

In contrast, the percentage increase in St. Louis’ low-income Zip Codes was much smaller than the increase in that region’s high- and moderate-income Zip Codes.

“Overall, home values in high-income Zip Codes have outpaced home-value gains in low-income Zips since the price peak of the mid-2000s,” Hermann wrote. “When taking a broader view, low-income Zip Codes have performed as well as high-income Zips since 2000 in fast-appreciating markets like San Francisco, while in many lagging markets, like St. Louis, home value gains in high-income Zips have typically surpassed those in low-income Zips. Furthermore, though income levels are important they are not determinative. The geographic patterns also underscore the fact that trends in home values are also a function of features such as density and proximity to the central city.”

The report noted changes in home price also vary within both metros. For example, metropolitan San Francisco has had the eighth-strongest post-recession recovery in home prices. As a result, median home values in San Francisco’s high-income Zip Codes are nearly $1.18 million while the median value in low-income ones are $586,000, more than three times the median price for the U.S. as a whole, which is $186,500.

However, home values in many of the region’s Zip Codes are still below their pre-recession peak. In all, 31 of San Francisco’s 142 Zips, or 22 percent, have yet to regain their mid-2000 peaks, including 50 percent of low-income Zips, 35 percent of moderate-income Zips and 14 percent of high-income Zips.

The report noted most Zip Codes that have not regained their peak median home values are located on the outskirts of metro San Francisco, particularly in northern Contra Costa County. That area is home to 10 of the 14 high-income Zip Codes where median prices have not exceeded their pre-recession peak as well as 8 of the 12 moderate-income ones and three of the five low-income ones. Most of the remaining Zip Codes where prices are still below pre-recession peaks are in the urban areas south of Oakland along the East Bay, which includes many low and moderate-income Zip Codes as well as two high-income ones.

“The story is somewhat different in metropolitan areas that have not seen San Francisco’s rapid price appreciation, such as St. Louis, where home values in June 2016 were still 10 percent below their pre-recession peak,” Hermann wrote. “Moreover, unlike San Francisco, prices in low-income Zip Codes in St. Louis have grown only modestly since 2000 and have increased much less than those in high- and moderate-income Zip Codes. In the run-up to peak, prices in low-income Zip Codes grew only marginally faster than prices in high-income Zips. Additionally, the post-recession upturn in home values in low-income Zips lagged the increase in high-income Zip Codes by nearly two years

The report can be found at