Despite the run-up in home prices in recent years, the values of most South Florida properties haven’t returned to the heady days of the housing bubble, a new report shows.
Less than three percent of Broward County homes and condominiums have bounced back to their pre-recession peaks, according to real estate website Trulia. That puts Broward among the 10 metropolitan areas nationwide with the lowest levels of home value recovery.
Broward’s median property value for March was $227,425, compared with the peak of $295,100.
Palm Beach County was slightly better, with 7.2 percent of homes back to the median peak value of $323,142. The county’s March median value was $256,589.
In Miami-Dade County, 10.8 percent of properties have returned to the peak median of $331,864. The county’s March median was $274,180.
“It may come as a shock that so few homes have recovered in South Florida because prices have risen strongly since the end of the recession,” said Ralph McLaughlin, chief economist for Trulia. “On the other hand, South Florida was one of the epicenters of the housing bubble. Prices fell so far that it’s going to take a while to recover.”
Greg McBride, chief financial analyst for the Bankrate consumer website, said it’s a wonder the South Florida percentages aren’t even lower.
“I don’t know of any properties that have returned to their pre-recession values,” McBride said. “Those values were in fantasy land a decade ago.”
Easy credit and fast-rising prices fueled a home-buying frenzy from 2000 to 2005. But the market eventually collapsed, leading to the Great Recession that lasted from late 2007 to mid-2009.
In South Florida, home prices finally hit bottom at the end of 2011.
Eli Beracha, professor of real estate investment at Florida International University, said bubble-era pricing isn’t the real estate benchmark that consumers today should be using.
The Trulia report shouldn’t scare people into buying now or persuade sellers into waiting for prices to rise even more, he said.
“We may not reach those high [pricing] levels anytime soon, maybe not in our lifetimes,” Beracha said.
Brad Hunter, chief economist at HomeAdvisor, predicts home prices in South Florida eventually will return to previous highs.
“But under the proper circumstances — a normal set of financing parameters and hopefully some income growth,” Hunter said.
Nationally, 34.2 percent of all homes and condos have reached their pre-recession peaks, Trulia said. At the current pace, all U.S. homes wouldn’t get back to their high values until late 2025, the website said.
Denver led the top 100 metropolitan areas with 98.7 percent of homes returning to their previous highs. San Francisco ranked second at 98 percent, while Oklahoma City was third at 94.3 percent.
Las Vegas topped the markets with the least amount of recovery, with 0.6 percent of properties returning to their previous peaks. Tucson, Ariz., was the next worst at 2.4 percent, followed by Fresno, Calif. at 2.5 percent.
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