Oakland, Austin, St. Petersburg, Fort Myers, San Francisco, Boise, Jacksonville, Detroit, New Orleans, Arlington, Tampa, Reno, Seattle, Denver, Mesa, Chandler, Portland, Aurora, Phoenix, San Antonio.

By Wolf Richter for WOLF STREET.

It was the most splendid condo bubble ever, topped off with a mania, driven by the Fed’s interest-rate repression that included trillions of dollars of purchases of MBS, which pushed down mortgage rates below 3%, triggering wild and woolly speculation from FOMO buyers and breathless investors – thinking of short-term rentals, long-term rentals, leveraged capital gains forevermore, a second or third home in the sun, a combination, or whatever.

In just 10 years into 2022 or 2023, depending on the market, prices exploded by 150%, 200% (Jacksonville, Tampa), 300% (Detroit, Aurora), or even 350% (Phoenix, Mesa) in the 20 cities we’re looking at here. Those explosive price gains culminated in a veritable mania from mid-2020 to mid-2022, and a good time was had by all.

Now these gains are unraveling. Condos are often the first and biggest movers in local housing markets – on the way up, and on the way down. And the price declines have picked up speed in most of the 20 cities we’re looking at here.

In some densely populated cities, such as San Francisco, condos make up a bigger part of the housing market than single-family homes.

Condos face all kinds of problems: They face too-high prices that exploded over the past few years. They face big special assessments for long-neglected structural repairs. They face dizzying increases in HOA fees. They face Fannie Mae’s ever-expanding Condo Blacklist that makes financing a unit in a listed building very difficult – and often it can only be sold to a cash buyer at a lower price. They face the threat that the condo building could end up on that Condo Blacklist. They face buyers that have to finance at mortgage rates that have returned into some sort of normal range. They face foreign-based owners who no longer want to live part-time in the US, such as Canadians, and are putting their condos on the market.

Long-term rental of condos has come under pressure from the flood of supply of new higher-end apartment developments that sprang up over the past few years. The vacation-rental boom over the past few years created a huge supply of vacation rentals, and demand for them may have peaked. For investors, condos are expensive to carry, and they can quickly become a money pit.

Successful sellers have figured out what it takes: Lower the price to where the buyers are even if it means giving up a big part of the recent gains, and accept the first serious offer that comes along because it may be the only offer. And two months later, prices may be even lower. He who panics first, panics best.

Price drops are spreading and steepening. In three of our 20 cities here, condo prices have already dropped by 20% or more from their peak through May. In two other cities, prices have dropped by 15% and 16%. The 20 cities are spread over 11 states, led by Florida, Texas, Arizona, California, and Colorado.

But Miami doesn’t yet qualify because condo prices haven’t dropped by 10% yet. In May, prices fell by 0.7% month-over-month, seasonally adjusted, by 4.1% year-over-year, and by 4.2% from the peak in January 2024. Prices are back where they’d been in January 2023.

The absurd price spikes fall apart. So here are 20 bigger cities where condo prices have dropped by 10% or more from their respective peaks in prior years.

Condo prices here are seasonally adjusted three-month average prices of “mid-tier” condos from the Zillow Home Value Index (ZHVI), which is based on millions of data points in Zillow’s “Database of All Homes,” including from public records (tax data), MLS, brokerages, local Realtor Associations, real-estate agents, and households across the US. It includes pricing data for off-market deals and for-sale-by-owner deals.

In the little tables for each city below, note the sharp month-to-month drops – a sign that the declines are heating up (the drops are not seasonal because the index is seasonally adjusted).

The left figure shows the drop from the peak. The right figure shows the still huge gains since 2000. In between are the month-over-month (MoM) drops and the year-over-year (YoY) drops.

This is what a condo bust in-progress looks like.

Oakland, CA, City, Condo Home Prices
From May 2022 peak	MoM	YoY	Since 2000
-23%	-1.7%	-9.5%	171%

Prices are back where they’d first been in April 2016. That was 9 years ago. The pace of the price drops has been accelerating.

Austin, TX, City, Condo Prices
From Jul 2022 peak	MoM	YoY	Since 2000
-23%	-0.7%	-5.9%	118%

Lowest since April 2021.

Saint Petersburg, Fl, City, Condo Prices
From Oct 2022 peak	MoM	YoY	Since 2000
-20%	-1.6%	-14%	216%

Lowest since October 2021.

Fort Myers, FL, City, Condo Prices
From July 2022 peak	MoM	YoY	Since 2000
-16%	-1.9%	-13%	152%

Lowest since March 2022. Note the month-to-month plunge of -1.9%, seasonally adjusted. That was a drop of $3,500. That’s a big one, but it is dwarfed by the month-to-month spikes of around $10,000 in the spring of 2021 during the Fed’s QE extravaganza while inflation had begun to soar, on the much-hyped theory at the time: Buy real estate with a 3% mortgage, no matter what the price, to beat inflation.

San Francisco, CA, City, Condo Prices
From May 2022 peak	MoM	YoY	Since 2000
-15%	-0.5%	-1.2%	143%

Back to March 2015.

Boise, ID, City, Condo Prices
From Jun 2022 peak	MoM	YoY	Since 2001
-14%	-0.2%	0%	221%

Back to June 2021.

Detroit, MI, City, Condo Prices
From Sep 2021 peak	MoM	YoY	Since 2000
-13%	-0.2%	-4.3%	271%

Where prices had first been in 2018.

Jacksonville, FL, City, Condo Prices
From Nov 2022 peak	MoM	YoY	Since 2000
-13%	-1.3%	-10.2%	164%

Back only to March 2022.

New Orleans, LA, City, Condo Prices
From Jun 2022 peak	MoM	YoY	Since 2000
-12%	-0.4%	-3.2%	100%

Back to November 2016.

Arlington, TX, City, Condo Prices
From Jun 2024 peak	MoM	YoY	Since 2000
-13%	-0.7%	-11.9%	246%

Prices had soared by 262% in the 10 years to June 2024. Half of that increase came during the four years from mid-2020 through mid-2024.

Tampa, FL, City, Condo Prices
From Sep 2022 peak	MoM	YoY	Since 2000
-12%	-1.1%	-9.0%	285%

Reno, NV, City, Condo Prices
From Jun 2022 peak	MoM	YoY	Since 2000
-12%	-0.2%	-2.6%	255%

Seattle, WA, City Condo Prices
From Jun 2022 peak	MoM	YoY	Since 2000
-12%	-1.1%	-3.8%	143%

Back to November 2017.

Denver, CO, City, Condo Prices
From Jul 2022 peak	MoM	YoY	Since 2000
-12%	-0.9%	-6.8%	144%

Back to July 2021.

Mesa, AZ, City, Condo Prices
From Aug 2022 peak	MoM	YoY	Since 2000
-11%	-0.6%	-4.8%	212%

Chandler, AZ, City, Condo Prices
From Aug 2022 peak	MoM	YoY	Since 2000
-11%	-0.5%	-3.8%	218.0%

Portland, OR, City, Condo Prices
From Jun 2022 peak	MoM	YoY	Since 2000
-11%	-0.6%	-3.9%	114%

Back to August 2016.

Aurora, CO, City, Condo Prices
From Jul 2022 peak	MoM	YoY	Since 2000
-11%	-1%	-7%	216%

Phoenix, AZ, City, Condo Prices
From Aug 2022 peak	MoM	YoY	Since 2000
-10%	-0.7%	-4.8%	243%

San Antonio, TX, City, Condo Prices
From Aug 2023 peak	MoM	YoY	Since 2000
-10%	-0.5%	-6.7%	133%

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