Five states are leading the U.S. housing recovery with higher home sales and appreciation. Hard hit Arizona, which had the second highest number of Alt-A loans in the nation in the real estate crash is leading the way with double digit appreciation over the last year.
The hike in home values averaged 16.6% in the past 12 months across Arizona, according to real estate research firm CoreLogic. The stunning increase in home prices is attributed to a lack of lower priced discounted foreclosures and pent up buyer demand, which has grown for the past six years since the housing bubble burst.
Near record low mortgage borrowing rates are also forcing many buyers off the fence. A lack of supply has driven home prices much higher in the Phoenix metropolitan area, the state’s biggest urban hub.
“While the pace of growth is moderating as we transition to the off season for home buying, we expect a positive gain in price levels for the full year,” said CoreLogic chief economist Mark Fleming. “The housing market continues its positive trajectory.”
Idaho is the second fastest appreciating state in the country with appreciation that hit 10.0% for the year at the end of July, CoreLogic said. The inner-mountain north-west has seen a swift recovery compared to much of the rest of the U.S.
Utah averaged 9.3% in higher home values over the past year, but still has a surplus of homes in the state’s largest region, Salt Lake City. Prices have been rising on bank owned REOs as lenders formally repossess homes and place them on the market for sale. More than 200,000 homes are in the foreclosure pipeline not yet been marketed for sale, according to government figures.
South Dakota, which has been impacted by the nation’s real estate crash much less with neighboring North Dakota than many other states saw a 8.3% hike in average appreciation in the past year, followed by Colorado rounding out the top five (7.3%).
Despite the five states leading the way out of the housing downturn with more than 20 others reporting higher home values, many hard hit regions are still experiencing a drop in home prices. Delaware has sustained average deflation of 4.8% over the past year to lead the downturn in values across the state. Alabama places a close second (-4.6%) followed by Rhode Island (-2.2%), Connecticut (-1.7%) and Illinois (-1.7%).