Lowest-Cost Homes Lag Pricing Recovery

Gudell: “Demand for the limited supply of entry-level homes is pushing up their values.”

SEATTLE—For commercial property, a recent trend has seen greater price appreciation in the market’s lower tiers. In the residential sector, though, the reverse is true: Zillow said Thursday that in 24 of the 35 largest US housing markets, the lowest-priced homes are least likely to have recovered their pre-recession values.

A case in point is Detroit, where nearly two-thirds of the most expensive homes have regained the value they lost when the market collapsed in 2008, and the average top-tier price, $284,800, is higher than it was during the housing bubble. In contrast, Zilow says that homes in the bottom third have only regained an average of 33.7% of their lost value over the past nine years, and are now worth a median of $53,000.