Housing recovery has some big winners – and a lot of losers

So how is the U.S. housing market doing?

It depends upon whom you ask.

A controversial report last week from Trulia, the popular real estate website, upends conventional wisdom that the housing market is back to where it was in the halcyon days of 2006 and 2007. Back then, and for a decade preceding it, the housing bubble was fueled by low mortgage rates and relaxed lending criteria.

The Trulia report asserts that vast swaths of the 120 million single-family homes across America – or about two-thirds – are worth less than they were before the 2008 financial crisis.

“Everything is not up,” said Ralph McLaughlin, the chief economist at Trulia. “The places where home prices are up tend to be few and far between. In only 37 major metropolitan areas out of the top 100 has the share of homes recovered exceeded 50 percent.”

McLaughlin said housing prices in big metropolitan areas with strong economies and lots of jobs – think San Francisco, New York, Dallas, Austin and Boston – are healthy. Home prices in the nation’s economic soft spots – such as Upstate New York, much of rural America, the Rust Belt, Baltimore and bubble cities such as Phoenix, Las Vegas and parts of Florida’s Gulf Coast – are wheezing.

Put simply, Trulia says, the housing market’s recovery has followed geography.

Others paint a different picture.

The S&P CoreLogic Case-Shiller Index and the Federal Housing Finance Agency House Price Index indicate that the market is back to its pre-bust levels.

“Overall, various different price metrics say we have surpassed prior peak levels in home value,” said Lawrence Yun, chief economist with the National Association of Realtors. “People who had purchased during the peak years and went through the downturn would now have fully recovered those values.”

The big difference between Trulia and the Realtors is that Trulia measures the value of homes based on its own algorithm it created to put a value on homes. The Realtors’ prices are based on actual sales.

According to a survey supplied by the Realtors, the median price for a U.S. home sold in the fourth quarter of 2016 was $235,000, compared with $221,900 in 2006, which is considered near the peak of the housing bubble.