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According to data from Zillow, home prices in the U.S. have climbed over 42 percent in the last decade. While the country’s housing market as a whole recovered strongly from the lows of the Great Recession, the recovery was not evenly distributed throughout the country’s major cities. As residents of some cities are being priced out of their own neighborhoods, property values in other cities have hardly changed. Even though housing prices have continued to rise during the COVID-19 pandemic, many are beginning to question whether the strong rise in home values will continue in densely populated cities.
The strong gain in the housing market over the last decade is not surprising, as home prices in the United states tend to rise sharply in the years following recessions. In the five-year periods following the last four recessions, the median home price in the U.S. grew an average of 32.7 percent.
Economic recovery following recessions is never felt uniformly throughout the country, and home price gains in the years since the Great Recession have been no different. The largest increases have been concentrated in Western states. Median home prices in Nevada, Idaho, Arizona, Colorado, and California all grew by more than 70 percent, which were the largest price increases in the country. On the other hand, home prices barely rose in some states, including in Delaware and New Jersey, where home prices increased at annualized growth rates below 1 percent. Only one state, Connecticut, actually experienced a decline in the median home price over the last 10 years.