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Housing Market in This Small City Took a Long Road to Recovery

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2017, U.S. home prices have finally recovered Returning from a post-financial crisis plunge to record highs, Meghan Downes has brought homes in Las Cruces, New Mexico to market.

Her list price of $ 205,000 was below the price she bought 10 years ago, but she didn’t have a taker. Dr. Downs, a professor of economics at New Mexico State University, has reduced the price to $ 195,000. There are no offers yet. She rented a house hundreds of dollars a month cheaper than paying her mortgage and resigned to bear her financial burden, at least until the market was fully restored.

“It was emotionally devastating, the amount of stress this house has created for me over the years,” she said. “You can see the numbers, but when you survive it, it’s really, really hard.”

Las Cruces is one of hundreds of cities. I’m back only now According to Zillow Group Inc., an analysis of home price data using the company’s own estimates shows that home prices peaked before the crisis years after other parts of the United States emerged from the collapse. did.

Meghan Downes, with his daughters at his home in Las Cruces, New Mexico, is currently estimated by Zillow to be around $ 323,000.

The pandemic ignited Record boom in home valueBut people who bought in these areas around the previous peak Right now, I’m back on the flat ground.. In addition, the economy and housing markets are showing signs of chilling again, threatening to curb further rises.

Some cities were lagging behind a wide range of markets due to regional economic shocks, such as large corporations leaving town, while others had relatively stable economies.

Las Cruces is a city of about 110,000, about 50 miles from El Paso, Texas. Employers in the area included state universities and missile ranges, neither of which closed stores during the recession. According to locals, the recession of 2007-09 had less impact on Las Cruces’ economy and housing market than in many parts of the country. However, household income in the region was lower than in the whole country, and house prices still fell sharply and took time to rise.

“Something like recovery has overtaken us,” said Dr. Downs’ colleague and Dean of Economics in New Mexico, Chris Erickson.

Typical home prices in Las Cruces peaked at nearly $ 242,000 in June 2008, according to Zillow data. It didn’t rise above that level until February of this year. The Zillow Index may differ from the median selling price data previously shown to recover at Las Cruces as it seeks to capture the value of all mid-priced homes in the region, not just those on the market. there is.

Prior to the crisis, Dr. Downs was worried that home prices across the country were rising rapidly relative to household income. But she wanted to buy a home, and the hot market meant limited inventory.

“If I had done a little more economic analysis and listened to my financial instincts instead of my heart, I probably wouldn’t have bought this house,” Dr. Downs said. “But that’s sunk cost.”

In early 2007, she paid $ 212,000 for a three-bedroom home. Shortly thereafter, she began to notice long-standing properties on the market. After that, selling prices began to fall. She said the owners of her city suddenly borrowed more than the value of their property and began to leave their homes, leaving them empty. She also estimates that it was tens of thousands of dollars underwater within a year of purchase.

The Downs family raises chickens in their backyard in Las Cruces, New Mexico.

In 2016, Matthew Downs, the husband of Dr. Downs, who was in the army, moved to a base in Georgia and is now towing three children. The move prompted a list of unlucky homes.

Last year, Dr. Downs and her family returned to town, and she returned to the Faculty of Economics in New Mexico. At that point, she talked to her students about her own home purchases and taught how easily her monetary policy could create a speculative bubble.

By 2021, house prices had risen enough to give her considerable fairness. Zillow is currently fixing her home price at around $ 323,000. She considered buying and selling in places with more space for her family. But that means buying her home when her home prices are at new highs, perhaps tempting her to ride her home bust again.

“Home ownership is a good thing we should try to encourage,” she said. “On the other hand, house prices are so high that they carry great risks.”

She decided to go back to her old house and keep some of the equity she had built over 15 years.

The value of the Meghan Downes home in Las Cruces, New Mexico is rising, but she has no plans to sell it soon.

Write to Ben Eisen [email protected] And Nicole Friedman [email protected]

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