Home prices remain at least 20% below peak

Years after the bubble burst, home prices in 12 states remain at least 20% below local peak levels, pointing to a lopsided recovery for the U.S. housing market, according to data released Tuesday.

Nevada’s home prices in October, including distressed sales, were 41% below a 2006 peak, the largest drop from bubble levels, despite explosive growth of 26% over the past year, according to CoreLogic, an Irvine, Calif.-based provider of financial and consumer information. Prices in Florida and Arizona in October were more than 30% below local peak levels.

But the picture on the national level is much milder. In October, national home prices were down 17% from a bubble peak.

Here’s what’s happening: While homes prices in some states are still recovering from sharp bubble drops, others recently hit new peaks. According to CoreLogic, home prices in 10 states have hit fresh peaks this year.

So what does this mean for a housing bubble?

“We went through the biggest housing bubble in U.S. history in the 2000s, and there is a knee-jerk reaction among some people who think, well, maybe we are doing that again,” Yale economist Robert Shiller, a home-price expert and Nobel Prize winner, said in a recent Barron’s interview. “But you have to consider that these are very rare phenomena, and it was such a decisive break at the end of the last housing bubble that we might not be psychologically ready for another bubble.”