Economic News

The Most Splendid Housing Bubbles in America, July Update: Year-Over-Year Declines Spread to Seattle

US Housing Case Shiller Seattle 2019 07 30

Seattle House prices fall year-over-year, as do New York & San Francisco Bay Area condo prices. Los Angeles, San Diego tick up. Denver, Boston hit new highs. Las Vegas, Miami, Phoenix aspire to their crazy peaks of Housing Bubble 1.

Year-over-year declines have spread to house prices in the Seattle metro, after having cropped up in condo prices in the San Francisco Bay Area and the New York metro in prior months, according to the CoreLogic Case-Shiller Home Price Index released today. These are the first such declines since Housing Bust 1 that followed our fabulous and crazy Housing Bubble 1. In many other markets, year-over-year price gains continued to wither away. So here we go.

Seattle House Prices:

Prices of single-family houses in the Seattle metro ticked up 1.0% in May from April, which was less than half the seasonal increase last year. And so the index fell 1.2% from May last year, the first year-over-year decline since Housing Bust 1.

The Case-Shiller Index is a rolling three-month average that is released with one-month delay; today’s release represents closings that were entered into public records in March, April, and May.

The index was set at 100 for January 2000; a value of 200 indicates prices have doubled since January 2000. Every housing market on this list of the most splendid housing bubbles in America has an index value of over 200 in its history, either during Housing Bubble 1 or during Housing Bubble 2. This is the minimum requirement to make this list.

New York Condo Prices:

The Case-Shiller Index, which in most cities only covers single-family houses, also covers condos in a handful of big condo markets. The index for condos in the vast New York City metro, instead of booking a seasonal uptick, remained flat in May compared to April. This left the index down 0.3% from May last year, the fourth month in a row of small year-over-year declines. The index is now back where it had first been in September 2017:

San Francisco Bay Area Condo Prices

Condo prices in the five-county San Francisco Bay Area – the counties of San Francisco, San Mateo (northern part of Silicon Valley), Alameda and Contra Costa (East Bay), and Marin (North Bay) – rose 1.3% in May from April, according to the Case-Shiller index. But it wasn’t enough. Compared to May last year, prices slipped 0.4%, the third month in a row of year-over-year declines – the first such event since April 2012 at the end of Housing Bust 1:

San Francisco Bay Area Single-Family House Prices

Single-family house prices in the five-county San Francisco Bay Area inched up 0.3% in May from April. This was merely one-third of last year’s increase in May. And it further eroded the year-over-year price gains, down to just 1.0% compared to May 2018 and left the index a tiny tad below its peak of July 2018:

Los Angeles House Prices:

The Case-Shiller index for houses in the Los Angeles metro rose 0.8% in May from April, thus inching to a new record. The index is up 1.8% from May last year:

San Diego House Prices:

In the San Diego metro, house prices ticked up 1.0% in May from April, and eked past the record set in July last year to a new record, with the index up 1.3% from May last year:

Washington DC:

House prices in the Washington D.C. metro rose 0.7% in April from March, and 2.9% from May last year. The index remains 7% below its crazy peak of Housing Bubble 1:

Boston House Prices:

House prices in the Boston metro ticked up 0.5% in May from April to a new record, according to the Case-Shiller Index. The year-over-year increase was whittled down to 3.6%, the smallest year-over-year increase since June 2015:

Denver House Prices:

In the Denver metro, house prices rose 0.6% in May from April, and this whittled the year-over-year gain down to 3.6%, the smallest such gain since April 2012:

Portland House Prices:

House prices in the Portland metro rose 1.0% in May from April and 2.4% from May last year, the smallest year-over-year increase since September 2012:

Phoenix House Prices:

In the Phoenix metro, house prices rose 0.7% in May from April and 5.7% compared to May last year. The Case-Shiller Index remains 16% below its totally nutty peak established during Housing Bubble 1:

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Miami House Prices:

House prices in the Miami metro ticked up 0.4% in May from April and were up 3.8% from May last year. The year-over-year gains in May and April of 3.8% each were the slowest since May 2012. The index remains 12% below the peak of Housing Bubble 1, when the entire housing market turned into a besotted casino, with house prices shooting up 140% in just five years, before they inevitably collapsed. So now the market is desperately trying to get back to those happy days:

Tampa House Prices:

In the Tampa metro, house prices ticked up 0.1% in May from April. This whittled the year-over-year gain down to 5.1%. The index remains 8% below the crazy peak during Housing Bubble 1:

Las Vegas House Prices:

House prices in the Las Vegas metro rose 0.6% in May from April, whittling down the year-over-year gain to 6.4%. As high and out of whack this year-over-year gain may seem, it was the smallest such gain since February 2017, which shows how big the price increases have been. The index remains down 18% from the crazy peak during Housing Bubble 1:

The Case-Shiller methodology of “sales pairs” compares the sales price of a house in the current month to the last transaction of the same house years ago, thereby tracking price changes of the same house over time. When the price increases, it’s not because the house got larger. It’s because it takes more dollars to buy the same house. So the index tracks the purchasing power of the dollar with regards to houses and therefore is a measure of one type of inflation: house-price inflation.

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