Boom-Bust, Boom-Bust?
By Wolf Richter for WOLF STREET.
Condo prices have shown that they’re subject to huge booms and busts. Here we’re going to look at bigger cities where prices of mid-tier condos have dropped below where they had been about 20 years ago at their respective peaks during Housing Bubble 1. There are not many among the bigger cities we’re tracking, but there are some.
The other day, we discussed the 23 Bigger Cities where Condo Prices Dropped by 12% to 28% through September. Prices in most of those 23 cities were still well above their highs of Housing Bubble 1. But in a few, they weren’t, and they’re back under the limelight here.
Silver Spring, MD: Prices of mid-tier condos in September 2025 were 11% below the peak in August 2006 and were back to where they had first been in August 2005, over 20 years ago. This city in the Washington DC metro had a gigantic condo bubble from January 2003 through August 2006, when prices of mid-tier condos exploded by 78%, before collapsing and giving up more than the entire gain by mid-2012. Then it started all over again, but more slowly.
St. Louis, MO: Prices of mid-tier condos in September 2025 were 7% below July 2007, and were back where they had first been in September 2005.
Methodology and data: These prices here are seasonally adjusted three-month averages of “mid-tier” condos and co-ops in “cities” 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. These are not median prices.
Some of the bigger cities might not be included here. The ZVHI for condos does not have data going back to 2003 for all cities, though it has more recent data on them. And so any of these cities with incomplete data, whose prices might have dropped below Housing Bubble 1 peaks, would not be included here.
Cape Coral, FL: Prices of mid-tier condos in September plunged back to where they had first been in November 2005, and were 12% below the July 2006 peak of Housing Bubble 1. Epic Boom-Bust, Boom-Bust.
Prices have plunged by 28% from their peak in July 2022 and by 16% year-over-year.
Baton Rouge, LA: Prices of mid-tier condos in September 2025 were 3% below the September 2008 peak during Housing Bubble 1 and were back where they’d first been in August 2007.
Lafayette, LA: This isn’t a bubble market, though it made a valiant effort in 2006. Prices of mid-tier condos in September 2025 were 15% below their peak in January 2008, and were below where they’d been in September 2003, the extent of the ZHVI condo data. Most of the 22 years in between, prices had been higher than in September 2025.
Oakland, CA, is almost there. Prices of mid-tier condos are just 0.6% above their April 2006 peak during Housing Bubble 1.
Prices have plunged by 28% from their peak in May 2022 to the lowest level since December 2015. Despite the plunge, these mid-tier condos are still the most expensive on this list, more than twice as costly as those in Ft. Myers, FL, below.
Fort Myers, FL, is almost there, with condo prices just 1.4% above the September 2006 peak during Housing Bubble 1. Prices have plunged by 21% from their peak in July 2022 and by 16% year-over-year.
Salinas, CA, is almost there. Prices in September 2025 were just 1.5% higher than at the August 2006 Housing Bubble 1 peak, after which prices collapsed by 75% in six years, after which prices quadrupled again in 10 years.
The city is the county seat of Monterey County – which is largely rural, but also includes the cities Monterey and Carmel-by-the-Sea where some ultra-expensive homes are located, such as along 17-Mile Drive.
Note that the mid-tier condos in Salinas are the second-most expensive on this list, behind Oakland, and almost twice as expensive as in Cape Coral, FL.
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“Boom-Bust, Boom-Bust” I remember once upon a time there was show on RT America that had the same name as well ..the amount of loonies as guests on that show talking about economic collapse definitely give Zerohedge a run for its money..actually some of them might have been the same doomer crowds running in the same circle.
Bust really does happen sometimes.
But probably won’t be as bad this time because the looming debt crisis in which intelligent people will avoid Treasury bonds like the plague, will cause huge inflationary pressures, keeping prices relatively higher than the depths of the Great Reession.
Please show a graph on the absolute drop from peak to trough in both condo and detached housing units in the markets covered by Wolfstreet for both bubbles.
In some past cases you are talking over 75%. It appears in most markets we are far from the troughs realized in 2012.
Dumb luck allowed us to buy a foreclosure in the Smoky Mtns. for 43% of the mortgage and sell it in 2023 for 3X our investment.
Cash is king and the market still has a ways to go to reflect underlying current and near term economic conditions.