The Most Splendid Housing Bubbles in America, March Replace: Greatest Month-to-month Worth Drops Now in Las Vegas, San Francisco, Seattle, Phoenix, Dallas, Denver

Double digit declines from peak in San Francisco Bay Area, Seattle, San Diego, Phoenix, Las Vegas.

By Wolf Richter for WOLF STREET.

View of Housing Bubble 2 in the San Francisco Bay Area:

This time it’s not an unemployment crisis that’s hitting the housing market. The job market is still tight with high pay rises – although the tech and social media sectors have started to shake. But it is mortgage rates that have returned to normal pre-QE levels of 6% to 7%, while CPI inflation is hovering around the same range. And they’re colliding with home prices, which have skyrocketed under the Fed’s quantitative easing and interest rate suppression.

And so home prices continued to fall, according to the S&P CoreLogic Case-Shiller Home Price Index for “January” — which is a three-month moving average of home sales publicly recorded in November, December and January, reflecting deals primarily made from October through December.

On a monthly basis, today’s Case-Shiller index of single-family home prices fell in 19 of the 20 metros it covers. Miami was the only exception, where the index was essentially flat. The 10 biggest dips by month occurred in:

1. Las Vegas: -1.4%
2. San Francisco Bay Area: -1.3%
3. Seattle: -1.4%
4. Phoenix: -1.2%
5. Dallas: -0.9%
6. Denver: -0.9%
7. Chicago: -0.5%
8. Portland: -0.7%
9. Tampa: -0.7%
10. Washington DC: -0.7%

Prices have fallen the most from their respective highs (from May to July 2022) in these metros:

• San Francisco Bay Area: -17.1%
• Seattle: -16.3%
• San Diego: -11.5%
• Phoenix: -10.5%
• Las Vegas: -10.1%
• Denver: -9.5%
• Portland: -8.6%
• Dallas: -8.5%
• Los Angeles: -8.3%
• Boston: -5.7%

Cheaper year-on-year now in four of the 20 subways:

• San Francisco Bay Area: -7.6%
• Seattle: -5.1%
• San Diego: -1.4%
• Portland: -0.5%

Down faster than up is a rare event in real estate markets, but it’s happening in the San Francisco Bay Area, where prices have fallen faster in the eight months since the peak than in the eight months before the peak. The Seattle and Las Vegas subways came close (percentages from and to the top):

• San Francisco Bay Area, May peak: -17.1%; +15.7%.
• Seattle, May peak: -16.3%; +19.7%.
• Las Vegas, July peak: -10.2%; +11.6%.

Methodology. The Case-Shiller Index uses the “sales pair” method and compares sales in the current month to sales of the same homes earlier. Price changes are weighted according to how long ago pre-sales were, and adjustments are made for DIY and other factors (Methodology). This “selling pair” method makes the Case-Shiller Index a more reliable indicator than median price indices, but it lags months behind.

San Francisco Bay The housing market is being impacted not only by mortgage rates but also by the stock market — particularly by IPOs and SPACs, which have largely collapsed, and by the tech and social media giants now laying off high-paying workers. But these home prices released today are based on completed sales in January and earlier, so the recent fireworks are still not reflected. That’s coming.

The Case-Shiller Index for “San Francisco” covers five counties in the nine-county San Francisco Bay Area: San Francisco, part of Silicon Valley, part of the East Bay, and part of the North Bay.

• Month to month: -1.3%.
• From the peak in May: -17.1%.
• YoY: -7.6%.
• Lowest reading since May 2021.

Seattle Subway:

• Month to month: -1.4%.
• From the peak in May: -16.3%.
• YoY: -5.1%.
• Lowest reading since September 2021.

San Diego Subway:

• Month by month: -0.4%.
• From the peak in May: -11.5%.
• YoY: -1.4%.
• Lowest reading since January 2022.

Metro Phoenix:

• Month to month: -1.2%.
• From June peak: -10.5%.
• Year over year: flat
• Lowest reading since January 2022.

Las Vegas Subway:

• Month to month: -1.4%.
• From July peak: -10.1%.
• YoY: +0.4%
• Lowest reading since January 2022

Denver Subway:

• Month to month: -0.9%.
• From the peak in May: -9.5%.
• Year-on-year: +1.0%.
• Lowest reading since January 2022.

Portland Subway:

• Month to month: -0.7%.
• From the peak in May: -8.6%.
• YoY: -0.5%.
• Lowest reading since December 2021.

Dallas Subway:

• Month to month: -0.9%.
• From June peak: -8.5%.
• Year over year: +5.0%

Los Angeles Subway:

• Month by month: -0.2%.
• From the peak in May: -8.3%.
• YoY: +0.9%.
• Lowest reading since January 2022.

Boston subway:

• Month by month: -0.3%.
• From June peak: -5.7%.
• YoY: +4.2%

Washington DC Subway:

• Month to month: -0.7%.
• From June peak: -5.0%.
• YoY: +2.4%

Tampa Subway:

• Month to month: -0.7%.
• From peak in July: -4.7%
• Year over year: +10.5%

Miami Subway:

• Month-to-month: basically unchanged (less than +0.1%).
• From peak in July: -2.6%
• YoY: +13.8%

New York subway:

• Month by month: -0.4%.
• From July peak: -2.3%
• YoY: +5.2%

For the Miami Metro, the Case-Shiller Index had a value of 399 points in January and December. The Case-Shiller indices were set at 100 for 2000. So, despite the recent drop, Miami home prices are still up 299% since 2000. This makes Miami the No. 1 in the most glorious real estate bubble in terms of price increases since 2000. Miami moved up to No. 1 because its prices have fallen less than prices in Los Angeles and San Diego, the former No. 1 at different times.

The New York Metro Index score of 270 indicates that housing price inflation has been 172% since 2000, and as crazy as that is, it ends this list of the most glorious real estate bubbles.

In the remaining six markets in the Case-Shiller Index, home prices have risen far less since 2000 and therefore do not qualify for this list. But in all of them, prices have been falling for months. Today’s Case-Shiller Index declines: Chicago (-0.5%), Charlotte (-0.3%), Minneapolis (-0.9%), Atlanta (-0.3%), Detroit (-0 .6%) and Cleveland (-0.6%). ).

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