The Most Splendid Housing Bubbles in America, April Update: Year-over-Year Price Drops Worsen in San Francisco, Seattle, San Diego, Portland, Las Vegas, Phoenix, Los Angeles, Denver

April 27, 2023

Even Miami lost ground. Spring selling season is a dud so far. And the banking crisis hasn’t even made it into the data yet. That’s still to come.

By Wolf Richter for WOLF STREET.

Spring selling season is here, but so far, it’s a dud. In some markets, home prices fell from the prior month, despite spring selling season: Miami, Seattle, Las Vegas, Portland, New York City, Dallas, for example.

In other markets, prices ticked up from the prior month, but a lot less than a year ago, and so year-over-year, even in those markets, home prices either fell further, or the year-over-year gain was further reduced. This is based on today’s release of the S&P CoreLogic Case-Shiller Home Price Index today.

For example, in the San Diego metro, house prices rose 1.5% from the prior month, but because that increase was a lot less than the increase in the same month last year, the year-over-year decline worsened to -4.1%, from -1.3% last month. San Diego’s year-over-year percentage change illustrates the principle of how the housing market is still worsening even with a seasonal uptick because that uptick was less than in the same period a year ago:

The effects of the banking crisis are not yet reflected in the housing market data. These home prices today are based on sales that closed in February and prior months, so the March fireworks at Silicon Valley Bank and at First Republic will make it into the housing data in future months.

Today’s S&P CoreLogic Case-Shiller Home Price Index for “February” is a three-month moving average of home sales that were entered into public records in December, January, and February.

The list of year-over-year price decliners keeps getting longer. Prices are now down in 8 of the 20 metros that the Case-Shiller Home Price Index covers, double the 4 metros a month ago (percentage in parentheses reflects the year-over-year change the prior month):

San Francisco Bay Area: –10.0% (from -7.7%)
Seattle metro: -9.3% (from -5.1%)
San Diego metro: -4.1% (from -1.3%)
Portland metro: -3.2% (from -0.5%)
Las Vegas: -2.6% (from +0.4%)
Phoenix: -2.1% (from -0.01%)
Los Angeles: -1.3% (from +1.0%)
Denver metro: -1.2% (from 0.0%)

Prices down the most from their respective peaks (ranging from May to July 2022) in these metros:

Seattle: -16.5%
San Francisco Bay Area: -16.3%
Las Vegas: -10.9%
Phoenix: -10.4%
San Diego: -10.1%
Denver: -8.8%
Portland: -8.7%
Dallas: -8.5%
Los Angeles: -7.3%
Boston: -5.6%

Methodology. The Case-Shiller Index uses the “sales pairs” method, comparing sales in the current month to when the same houses sold previously. The price changes are weighted based on how long ago the prior sale occurred, and adjustments are made for home improvements and other factors (methodology). This “sales pairs” method makes the Case-Shiller index a more reliable indicator than median price indices, but it lags months behind.

Seattle metro:

Month to month: -0.3%.
From the peak in May: -16.5%.
Year over year: -9.3%.

And here are the year-over-year percentage changes of the Seattle index. The current year-over-year decline of 9.3%, came after the 5.1% and 1.8% declines in the prior two months:

The San Francisco Bay Area:

Month to month: +1.0%.
From the peak in May: -16.3%.
Year over year: -10.0%.

And here are the year-over-year percentage changes of the index for the San Francisco Bay Area. This was the fourth month in a row of ever steeper year-over-year declines.

San Diego metro:

Month to month: +1.5%.
From the peak in May: -10.1%.
Year over year: -4.1%.

Phoenix metro:

Month to month: +0.1%.
From the peak in June: -10.4%.
Year over year: -2.1%

Las Vegas metro:

Month to month: -0.9%.
From the peak in July: -10.9%.
Year over year: -2.6%

And here are the year-over-year percentage changes of the index for Las Vegas. This was the month the index flipped to a year-over-year decline.

Denver metro:

Month to month: +0.8%.
From the peak in May: -8.8%.
Year over year: -1.2%.

Portland metro:

Month to month: -0.1%.
From the peak in May: -8.7%.
Year over year: -3.2%.

Dallas metro:

Month to month: -0.02%.
From the peak in June: -8.5%.
Year over year: +2.0%

Los Angeles metro:

Month to month: +1.0%.
From the peak in May: -7.3%.
Year over year: -1.3%.

Boston metro:

Month to month: +0.1%.
From the peak in June: -5.6%.
Year over year: +2.2%

Washington D.C. metro:

Month to month: +0.4%.
From the peak in June: -4.6%.
Year over year: +1.1%

Tampa metro:

Month to month: +0.1%.
From peak in July: -4.7%
Year over year: +7.7%

Miami metro:

Month to month: -0.4%
From peak in July: -2.9%
Year over year: +10.8%

And here are the year-over-year percentage changes of the index for Miami. You can see that the market is about six to eight months behind Seattle:

New York metro:

Month to month: -0.3%.
From peak in July: -2.6%
Year over year: +3.6%

The Case-Shiller indices were set at 100 for the year 2000. So that Miami index at 397 points in February is up by 297% since 2000. This makes Miami the #1 most Splendid Housing Bubble in terms of price increases since 2000. Miami has moved into the #1 slot because its prices started to fall later than in the prior #1, Los Angeles and then San Diego.

The New York metro index value of 269 indicates that house price inflation since 2000 was 169%, and though this is still a huge amount of house price inflation in 22 years, the metro forms the tail end of this list of the Most Splendid Housing Bubbles. The remaining six markets in the Case Shiller index have experienced far less house price inflation since 2000, and don’t qualify for this list.

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