SEATTLE—For commercial property, a recent trend has seen greater price appreciation in the market's lower tiers. In the residential sector, though, the reverse is true: Zillow said Thursday that in 24 of the 35 largest US housing markets, the lowest-priced homes are least likely to have recovered their pre-recession values.
A case in point is Detroit, where nearly two-thirds of the most expensive homes have regained the value they lost when the market collapsed in 2008, and the average top-tier price, $284,800, is higher than it was during the housing bubble. In contrast, Zilow says that homes in the bottom third have only regained an average of 33.7% of their lost value over the past nine years, and are now worth a median of $53,000.
“The housing market as a whole is moving at a steady clip, with high demand and low inventory combining to maintain strong home value appreciation,” says Svenja Gudell, chief economist with Zillow. “Most new construction has been at the higher end of the market, so demand for the limited supply of entry-level homes is pushing up their values, but these homes also lost more value when the bubble burst.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
