While no one wants another housing bubble, people across the U.S. are hopeful that housing prices will continue their recovery following the Great Recession.
In fact, earlier this week the S&P/Case Shiller real estate index, which measures the home prices in 20 of the largest U.S. cities baselined to 2000, was announced through July -- and five cities have seen their prices skyrocket in 2013:
As you can see in the chart, the markets in San Francisco, Las Vegas, Atlanta, Los Angeles and San Diego have led the charge for the recovery in housing prices. Meanwhile, cities like Charlotte, Washington D.C., Minneapolis, New York, and Cleveland have all seen their home prices grow slower than the U.S. average over the last year.
|City||Month over Month||2013||1 Year||3 Years||5 Years|
San Francisco Of the five cities that have had the best rebound in home prices this year, San Francisco has seen its prices recover the most since they bottomed out in March of 2009. Home prices in the City by the Bay have grown over 50% in a little over 4 years.
Surprisingly, according to the latest data from the FDIC, despite Wells Fargo & Co (NYSE:WFC) being headquartered in San Francisco, Bank of America Corp (NYSE:BAC) has a commanding lead in market share, with over 50% of deposits in the area versus 19% for Wells Fargo as of June 2012 . Considering those two are two of the three of the largest mortgage originators in the country -- they could both set to benefit as San Francisco continues to rebound.
Las Vegas Las Vegas is a great example of the roller coaster housing prices we all witnessed as it is one of the cities that saw its prices rise and fall the most during the mortgage boom and bust:
Home prices in Nevada fell over 60% from their peak in August 2006 to their low in March 2012, but have rebounded 35% over the last 16 months. While Bank of America and Wells Fargo also have a major presence in Las Vegas, Citigroup Inc. (NYSE:C) rounds out the top three. While Citi announced it was eliminating 1,000 jobs this week in its mortgage unit, it had more to do with the slowdown in refinancing's, than business conditions in specific markets. While Vegas may not see a spike in prices like it did from 2003-2006, it is certainly on the mend.
Atlanta When compared to the other four cities, Atlanta is very unique in that it didn't see nearly the run up in home prices in the 2000's, as they peaked in January 2007 at a gain of almost 37% over the January 2000 levels. By comparison, home prices in San Diego rose 150% in a 5 year period.