1 New High. 19 metros below 2022 peaks: Austin, San Francisco, Phoenix, Denver, Salt Lake City, Portland, Seattle, Dallas, Honolulu, Nashville…
By Wolf Richter for WOLF STREET.
Active listings have been surging for months in practically every major market, including in formerly hot markets such as Florida. Sellers are grappling with an unexpected phenomenon: While inventories are piling up, buyers are on strike because prices are too high even though mortgage rates have dropped a bunch over the 10 months through mid-September. Since the rate cut, mortgage rates have risen again but at around 6.6% remain a lot lower than they’d been.
The lower mortgage rates have brought out the sellers, but not the buyers who remain on strike because prices are too high. And so, prices even in markets such as San Diego have started to succumb to gravity.
Down from prior month: Prices of single-family houses, condos, and co-ops sagged in September from August in 26 of the 28 large metros here.
The two exceptions were Baltimore, where prices were unchanged, and the vast New York City metro where prices rose 0.3% to a new high, according to data from the “raw” Zillow Home Value Index (ZHVI).
By Metropolitan Statistical Area (MSA), the top 20 month-to-month price declines:
- San Francisco: -1.1%
- San Jose: -0.9%
- Austin: -0.8%
- Tampa: -0.7%
- Denver: -0.6%
- San Diego: -0.5%
- Sacramento: -0.5%
- Dallas: -0.5%
- Atlanta: -0.5%
- Houston: -0.4%
- Phoenix: -0.4%
- Portland: -0.4%
- Kansas City: -0.4%
- Columbus: -0.4%
- Miami: -0.3%
- Boston: -0.3%
- Seattle: -0.3%
- Minneapolis: -0.3%
- Charlotte: -0.3%
- Nashville: -0.3%
Down from their 2022 peaks: Home prices in 19 of the 28 MSAs here were down from their peaks in 2022, led by these 10:
- Austin: -20.4%
- San Francisco: -9.4%
- Phoenix: -8.0%
- Denver: -6.4%
- Salt Lake City: -5.7%
- Portland: -5.1%
- Seattle: -4.7%
- Dallas: -4.4%
- Honolulu: -4.4%
- Nashville: -2.6%
New highs: Prices in the New York City metro rose to a new high; in Baltimore, they stayed at the new high for the third month in a row.
The 28 Most Splendid Housing Bubbles in America.
| Austin MSA, Home Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -20.4% | -0.8% | -4.0% | 163% |
The price index has now dropped below where it had been in May 2021.
| San Francisco MSA, Home Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -9.4% | -1.1% | 1.7% | 295% |
Methodology: The ZHVI 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 individual households across the US. It includes pricing data for off-market deals and for-sale-by-owner deals. Zillow’s Database of All Homes also has sales-pairs data.
| Phoenix MSA, Home Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -8.0% | -0.4% | 0.5% | 224% |
To qualify for this list, the market must be one of the largest Metropolitan Statistical Areas (MSA) by population, and it must have a current ZHVI of over $300,000. The metros of New Orleans, Oklahoma City, Tulsa, Cincinnati, Pittsburgh, etc. don’t qualify because their ZHVI is below $300,000, though they too had huge runups of home prices in recent years.
| Denver MSA, Home Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -6.4% | -0.6% | 0.3% | 215% |
| Salt Lake City MSA, Home Prices | |||
| From July 2022 peak | MoM | YoY | Since 2000 |
| -5.7% | -0.1% | 1.3% | 214% |
| Portland MSA, Home Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -5.1% | -0.4% | 0.5% | 220% |
We started this series in 2017 to document visually and metro-by-metro the massive surge in home prices triggered by years of interest rate repression and QE by the Fed. But since 2022, we have much higher mortgage rates and QT, and the dynamics have changed.
We explained here why we switched to the “raw” ZHVI after years of using the Case-Shiller Home Price Index.
| Honolulu, Home Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -4.4% | 0.1% | 0.4% | 282% |
| Seattle MSA, Home Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -4.7% | -0.3% | 4.3% | 240% |
| Dallas-Fort Worth MSA, Home Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -4.4% | -0.5% | -0.3% | 198% |
| Nashville MSA, Home Prices | |||
| From July 2022 peak | MoM | YoY | Since 2000 |
| -2.6% | -0.3% | 1.1% | 219% |
| Las Vegas MSA, Home Prices | |||
| From June 2022 peak | MoM | YoY | Since 2000 |
| -2.2% | -0.1% | 5.7% | 179% |
| Tampa MSA, Home Prices | |||
| From Jul 2022 peak | MoM | YoY | Since 2000 |
| -2.3% | -0.4% | -0.3% | 216% |
| San Jose MSA, Home Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -2.4% | -0.9% | 7.8% | 336% |
If these charts look funny, in an absurd sort of way, the way housing market charts should never ever look, it’s because this housing market has been whipped into crazy distortions by the Fed’s monetary policies that then U-turned in 2022, including nearly $2 trillion in QT by now.
| Houston MSA, Home Prices | |||
| From Jul 2022 peak | MoM | YoY | Since 2000 |
| -1.9% | -0.4% | 0.4% | 154% |
| Minneapolis MSA, Home Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -1.5% | -0.3% | 0.2% | 159% |
| Charlotte MSA, Home Prices | |||
| MoM | YoY | Since 2000 | |
| -0.3% | 2.1% | 172.6% | |
| San Diego MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.5% | 4.8% | 338% |
| Los Angeles MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.3% | 5.1% | 332% |
| Washington D.C. MSA, Home Prices | |||
| MoM | YoY | Since 2000 | |
| 0.0% | 3.5% | 215% | |
| Baltimore MSA, Home Prices | |||
| MoM | YoY | Since 2000 | |
| 0.0% | 2.5% | 175% | |
| Miami MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.3% | 3.2% | 335.0% |
| Atlanta MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.5% | 1.6% | 166% |
| Kansas City MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.4% | 2.7% | 178% |
| Columbus MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.4% | 3.2% | 155% |
| Boston MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.3% | 5.2% | 228% |
| Chicago MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.2% | 4.9% | 114% |
| Philadelphia MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| -0.1% | 4.5% | 202% |
| New York MSA, Home Prices | ||
| MoM | YoY | Since 2000 |
| 0.3% | 7.1% | 212% |
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Just mentioning LA & San Diego, I know one reader here is going to be stoked.
That’ll be me I guess and stoked? Not yet and not even close, these drop is the definition of watching paint dry…at least it’s dripping down, that’s if hopefully by Spring season, it doesn’t shoots back up again. Wake me up when we start getting some momentum like we saw 2021 to 2022 drop…-0.5% drop in SD is hardly cause for celebration and RE market take time, although in all fairness, the insanity that shot up surely didn’t take as long as conventional wisdom…once in a lifetime event perhaps..
That’s cool, either way it goes, unless it will unwind back to fundamentals in 3 years, I mentally are checking out of the housing market…will observe at a distant with contempt, disdain and amusement as a spectator to the circus.
There you are.
I feel you man, it’s not as bad in Phx but it ain’t great.
Patience will pay off for us.
Regression to the mean is a rule in numbers that cannot be escaped.
CA has such a property tax scam. One house can be paying next to nothing bc they bought it back in the day and the next house $10-15k. Yes its great if you bought in (were alive) back in the day but what about everyone else?
Ummm, that’s how the world works. Your neighbor bought his car/boat/RV when rates were lower. Is that unfair? Your other neighbor went to college in the 80s and graduated with no debt. Is that unfair?
If you can afford to pay today’s prices, you can afford today’s taxes. Working class people used to be able to afford homes. Their real income has come nowhere close to keeping up with the power couples and tech people with inflated salaries driving up home prices everywhere. So the solution is to tax them out of their homes?
Exactly. Bruce wants grandma on SS to be paying the same property tax as the idiots who bought a $500K house for over $1M. And as if CA’s mostly terrible (and shrinking) public school system would somehow be better if grandma started eating dog food and “paying her fair share”.
Call me crazy but this stuff has still got a long way to go to be at all reasonable, unless we make up for it with a good amount of additional inflation (likely).
From the charts it looks mostly like seasonal weakness rather than popping of bubble.
Most MSA’s showing Year-over-Year gains, higher highs and higher lows.
Fed didn’t tighten enough?
They’re not seasonal because they’re not aligned 12 months apart. You look at the charts and you see that the last few years were completely bizarre, in terms of price movements, including now. Most of those metros that are up yoy are so because they had a huge short (2-3 months) price spike earlier this year when mortgage rates plunged. There was nothing seasonal about it. And then that fizzled, even as mortgage rates continued to plunge. The YOY gains have been diminishing for months. They already reached zero or negative in some metros. And a big majority of them (19) are below their all-time high in mid-2022.
These are really crazy charts. They’re absurd. Something like this should never happen. You need to look at them!!! To brush this off as “seasonal” is beyond funny.
Sales and demand have COLLAPSED. Sales volume of existing homes in 2024 will likely go down in history as the worst year in the data going back to 1995 (Fannie Mae), despite population growth over these 30 years! Inventory is surging. These prices are absurd, which is why demand has collapsed. A very small number of sales drove up prices in a few months earlier this year. It was a bizarre brief episode, some leftover buyers suddenly went nuts maybe, and it’s over.
If the bubble pops the Fed will print trillions to blow it right back up. An exercise in futility.
@Cem most cars put around 50hp per litre of displacement for decades. In 1978 the 2.0L BMW 320i had 101hp and the 3.0L Porsche 911 had 172hp.
Today we have “turbocharged” cars and a 2.0L BMW puts out well over 100hp per Litre and a 3.7L 911 Turbo puts out over 150hp per Litre.
When I was a kid there was a lot less “multi-generational wealth” and it seemed like most people were like me with working class parents and grandparents from “the old country”.
Pretty much every boomer that has owned real estate in the US has done well and most seem to want to help their kids and I think that this wealth transfer has “turbocharged” the housing market (in places where the wealthy want to live).
Google just found that the median list price of a home in the SF Peninsula city where my working class parents bought a $22K home just over 60 years ago is $3 million.
In the early 60’s almost everyone saved up for a down payment and paid off the mortgage over 30 years, Today in this “turbocharged” market few people are saving a down payment and getting $3mm loans with $25K PITI payments in Nor Cal or even to buy the tiny “starter” homes that cost half as much with monthy payments of “only” $12K.
Austin is the only one where the downturn is profound. The rest seem to be still in a Mexican standoff over the last two years
… as is seasonally expected.
Late cycle economy. Layoffs will start in the beginning of 2025, after Q4. Last breath of an over leveraged consumer. Data looks decent now until it does NOT on a dime change. Cash is king even though the media likes the brainwash everyone that it is not. The house market needs a big reset.
If I had a quarter for every guy who comes on here with prognostications about upcoming recessions, layoffs, and how we shouldn’t trust the data…
Those everyday is dooms day guys make YouTube fun.
It has been said before: these initial declines do not make current prices good. They only make them less bad. Less bad is still (very) bad, and I continue to believe that buyers at current prices risk “going underwater” on their mortgage loan in the next 1 – 2 years. Certainly possible. The RE price tree will not grow to the sky.
An attitude of high price entitlement still seems to be in effect among some sellers. “My neighbor sold their similar house last year for X, so I should be able to do the same.” Ah, no you should not, but that attitude is still in play. Hopefully it will change if the RE market continues in the current direction.
More like…
My neighbor sold their similar house last month for X, so I should be able to do the same plus ten percent more
Is there data that reveals the number of homeowners who own multiple homes — by MSA? (For example, I’m guessing that the Florida MSA’s are higher than average for multiple-homeownership?).
Has the trend been upward, and does it show signs of peaking?
What’s the causality between multiple-homeownership and average dwelling price?
Thanks (and apologies if this has been covered before)