When the Great Recession hit, the unemployment rate in Modesto, Calif., hit a staggering 17.5%. The city, which was known for its agricultural industry and for being the home of Gallo Winery, the largest exporter of California wines, had the third highest foreclosure rate in the country in 2010.
Today the San Joaquin Valley city is emblematic of the post-housing crisis recovery. Modesto had the largest rebound in home prices in the country, according to a new report from real-estate website Owners.com. In Modesto, the price per square foot has increased nearly 115% from its crisis era-trough to its current peak of $182 per square foot.
California as a whole has rallied the most from the housing crisis. Among the 20 housing markets that had the biggest rebounds, half are located in California. Other states with cities that experienced major rebounds include those that were hit hardest during the Great Recession: Nevada, Arizona and Florida.
Top 20 housing markets that rebounded the most from the recession City Pre-crisis peak per square foot (2007-2008) Post-crisis trough per square foot (2009-2018) Post-crisis peak per square foot (2009-2008) Percent increase trough to post-crisis peak Change from pre-crisis peak to post-crisis peak Modesto, Calif. $200 $85 $182 114.8% -9.1% Merced, Calif. $180 $73 $156 114.7% -13.1% Reno, Nev. $193 $97 $204 110.3% 6.0% Vallejo-Fairfield, Calif. $270 $121 $251 107.2% -7.3% Stockton-Lodi, Calif. $220 $98 $202 106.2% -7.9% Bend-Redmond, Ore. $196 $112 $228 102.8% 16.5% San Jose-Sunnyvale-Santa Clara, Calif. $498 $365 $732 100.8% 47.1% San Francisco-Oakland-Hayward, Calif. $453 $300 $580 93.0% 28.0% Yuba City, Calif. $159 $83 $158 90.8% -0.7% Sacramento-Roseville-Arden-Arcade, Calif. $220 $121 $230 89.4% 4.3% Cape Coral-Fort Myers, Fla. $169 $82 $154 88% -8.8% Port St. Lucie, Fla. $145 $74 $139 87.6% -4.2% Palm Bay-Melbourne-Titusville, Fla. $129 $71 $133 87.2% 3.3% Las Vegas-Henderson-Paradise, Nev. $178 $79 $147 87% -17.1% Punta Gorda, Fla. $128 $70 $130 86% 1.2% Santa Rosa, Calif. $346 $217 $404 86% 16.8% Carson City, Nev. $187 $96 $176 84% -5.6% Detroit-Warren-Dearborn, Mich. $123 $71 $130 81.8% 5.4% Phoenix-Mesa-Scottsdale, Ariz. $159 $81 $147 80.9% -7.3% Napa, Calif. $370 $218 $392 80.2% 6%Homes prices in some of California cities — such as Modesto and Merced — have not yet returned to their pre-crisis highs. But other markets, like San Francisco and San Jose, have experienced record-breaking price appreciation.
The tech sector in California is largely to thank for the improved fortunes of these housing markets, said Kevin Karty, vice president of enterprise data at Owners.com. It can be considered an extended commuter zone for San Francisco, Karty said.
Indeed, Modesto and nearby Merced and Yuba City have all witnessed a sizable influx of former residents of the San Francisco Bay Area and Silicon Valley who are looking for affordable housing within a relatively manageable driving distance from the nation’s tech hub.
Also see: What home buyers are willing to give up to live in a good school district
Nationally, home prices have recovered 36% from the low point hit during the recession.
But in the smaller and mid-sized markets that were less hard-hit by the downturn in home prices, the recovery has been more muted. These cities have struggled to recover because of their relative small size and distance from major industrial hubs, Karty said.
Home prices in Glen Falls, N.Y., located 55 miles north of Albany, have only ticked up 7.9% from their previous nadir. Other cities with similarly lackluster rebounds include Little Rock, Ark. (9%), El Paso, Texas (9.4%), and Charlottesville, Va. (11.6%).
Bottom 20 housing markets that rebounded the least from the recession City Pre-crisis peak per square foot (2007-2008) Post-crisis trough per square foot (2009-2018) Post-crisis peak per square foot (2009-2008) Percent increase trough to post-crisis peak Change from pre-crisis peak to post-crisis peak Glens Falls, N.Y. $122 $112 $121 7.9% -0.7% Farmington, N.M. $136 $120 $130 8.6% -4.2% Goldsboro, N.C. $94 $88 $96 8.8% 1.9% Harrisburg-Carlisle, Pa. $115 $108 $117 9.0% 1.5% Little Rock-North Little Rock-Conway, Ark. $88 $85 $93 9.0% 5.9% El Paso, Texas $93 $84 $92 9.4% -0.9% Danville, Va. $72 $70 $76 9.5% 6.4% Bloomington-Normal, Ill. $105 $95 $104 9.5% -0.9% Lewiston-Auburn, Maine $113 $92 $101 9.5% -11% Peoria, Ill $96 $89 $98 9.6% 1.6% Greenville, N.C. $99 $88 $97 9.6% -2.2% Warner Robins, Ga. $89 $77 $85 10% -4.6% Hot Springs, Ark. $82 $73 $81 10.2% -1.7% Lebanon, Pa. $100 $94 $104 10.4% 3.8% Albany-Schenectady-Troy, N.Y. $137 $128 $141 10.5% 3.0% Killeen-Temple, Texas $79 $74 $83 11.5% 5.3% Charlottesville, Va. $204 $161 $180 11.6% -12% Florence, S.C. $104 $97 $108 11.6% 3.8% Fayetteville, N.C. $90 $82 $91 11.8% 1.2% Reading, Pa. $112 $95 $107 11.8% -4.7%
