What we’re looking at: Raging House-Price Inflation.
By Wolf Richter for WOLF STREET.
House prices soared by 14.6% from a year ago, according to the National Case-Shiller Home Price Index, the biggest increase in the data going back to 1987. But it pales compared to the raging mania that has taken hold of individual metros.
Today’s release, called “April,” is based on a three-month average of sales recorded in public records in February, March, and April, of deals made a month or two earlier. So that’s the time frame. The metros here – the most splendid housing bubbles – are in order of the biggest house price increases since the year 2000:
Los Angeles metro:
Prices of single-family houses in the Los Angeles metro jumped by 1.8% in April from March and by 14.7% year-over-year. All Case-Shiller Indices were set at 100 for January 2000. The index value for Los Angeles of 339 indicates that house prices soared by 239% since January 2000, despite the collapse during the Housing Bust, which makes Los Angeles the most splendid housing bubble on this list.
San Diego metro:
House prices jumped by 3.2% in April from March, after having jumped by 3.4% in March from February, and are up 21.6% year-over-year, the second-hottest annual house price increase behind Phoenix. Prices have soared 231% since 2000:
What is this? Raging “House-Price Inflation.”
The Case-Shiller Index, by using the “sales pairs method,” compares the price of a house that sold in the current month to its price when it sold previously. Home improvements are taken into account. The index tracks the amount of dollars it takes to buy the same house over time. This makes the index a measure of house price inflation as it shows the extent to which the purchasing power of the dollar has dropped with regards to the same house.
The charts below are on the same scale as Los Angeles and San Diego to show the relative magnitude of house price inflation between the individual markets since 2000.
House prices in the Seattle metro jumped by 3.1% in April, after having spiked by 4.7% in March, for a classic WTF moment. Year-over-year, the index is up 20.2%, the third-hottest annual house price inflation on this list, after Phoenix and San Diego. Since 2000, house prices have skyrocketed 225%.
San Francisco Bay Area Houses and Condos:
The Case-Shiller Index for “San Francisco” – it covers the five counties of San Francisco, San Mateo, Alameda, Contra Costa, and Marin – spiked by 3.1% in April after having spiked by 3.3% in March, and is up 15.1% year-over-year. House prices have skyrocketed 218% since 2000.
But condo prices in the San Francisco Bay Area have been roughly flat since April 2018:
House prices jumped 2.1% in April and by 15.4% year-over-year. Since 2000, they’re up 184%:
House prices jumped 2.4% in April and 14.2% year-over-year. Up 187% since 2000, they have now surpassed the insane peak of Housing Bubble 1:
New York City metro: Condos and Houses:
For the Case-Shiller Index, the New York City metro includes New York City proper plus numerous counties in the states of New York, New Jersey, and Connecticut. This is a vast housing market that includes some of the most expensive submarkets in the US.
Condo prices for New York – condos are heavily concentrated in New York City, particularly Manhattan – declined 0.1% in April and have roughly been at the same level since February 2018, with the high in October 2018. Since 2000, and despite the last three years of flat-lining, prices have soared 174%:
House prices in the New York metro rose 0.8% in April from March and are up 13.5% year-over-year. It took the index 15 years to surpass the peak of Housing Bubble 1:
Washington D.C. metro:
House prices rose 2.3% for the month and are up 13.6% year-over-year:
The Case-Shiller Index for the Boston metro jumped 2.5% for the month and 16.2% year-over-year.
House prices jumped 2.3% in April and 15.4% year-over-year:
House prices jumped 2.7% for the month and are up 15.4% year-over-year:
The Case -Shiller index for the Phoenix metro spiked 3.3% in April, after having spiked 3.4% in March, and is up 22.3% year-over-year, the biggest year-over-year increase in Phoenix since the peak months of the insane bubble days in 2005, and the hottest annual house price inflation among the Most Splendid Housing Bubbles here:
Las Vegas metro:
House prices jumped 2.5% in April and 12.5% year-over-year:
House prices spiked 2.9% in April and 15.9% year-over-year. The index is up 126% since 2000. In the other cities in the 20-city Case-Shiller Index, the two-decade house price inflation amount to less than 120%, the cut-off mark for this list. By comparison, the Consumer Price Index, one-third of which is composed of understated housing components, rose by 59% over the same period):
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