It’s been ten years since the U.S. housing market crashed and caused many banks to close their doors and many people to lose their homes.
The question today is, has the market recovered? It depends on where you look….it is predicted that the market will have fully recovered by 2025, says Ralph McLaughlin, chief economist.
When predicting the recovery of the housing market, it is vital that you keep in mind the key factor of location.
Housing development varies greatly from state to state and it is places like California where we see a complete recovery in some areas and little to no recovery in others.
Such a large range between close by spaces is due to factors such as the city’s overall well-being. By this, I mean population growth and job outlook.
When a community is expanding and working within its own limits it is inevitable that different areas in the community will also look up, such as the housing market.
When developing the statistics in assessing the recovery of the housing market we compare current data to pre-recession data.
To put it in perspective; Kiran Dhillon, a writer for Forbes magazine, says median house prices have rebounded to $185,000 whereas pre-recession levels were at $200,000.
This gap is not a dramatic one and proves that the U.S is doing something right in their mission to full economic recovery.
When factoring in newly constructed homes, it is found to be highly below the pre-recession peak levels.
This, showing the construction market to be recovering at a much slower rate than home sales.
Along with these statistics, we can note that foreclosures were found by Dillon to be 186% above peak recession levels. Meaning, U.S. citizens are often buying houses they are unable to afford and being forced to give them up to the banks.
2008, during the long period of economic downturn and financial difficulty for most of the country, the foreclosure crisis was what caused it all to spiral out of control.
The Federal Reserve began straying from their basic rules to only lend in a liquidity crisis as they did not know of any other way to help the nation and hopefully prevent the collapse that was to later come.
All in all, when answering the question “has the housing market recovered since 2008?” the general consensus is no, though, on its way, it will still take many years to reach full financial recovery to be back to pre-recession levels.
The U.S. housing market is a very complex market and will take effort from the government, borrows, and lenders before they will reach full recovery.