Case Shiller 20 city home price index

[GON]

Interesting home sales price chart. The chart is helpful to tell the story "are home prices really falling and if so by how much". The chart shows home prices are not falling; any fall in single family home prices is inconsequential when looking at the five-year average. The only outlier is San Francisco. No surprise Chicago was the worst performing market over the past 20 years.

From Chuck Cowan:

The average home price in the US is up over 53% in the last 5 years, more than double the increase in wages. The widening gap between prices and incomes has led to the least affordable housing market in history.

 

[zzyzzx]

When only rich people can afford to buy housing, it brings the average up. This is what's keeping average house prices from falling.

 

[Dave Hess]

Miami is very expensive for a sketchy city.

 

[GON]

Another chart for National Board of Realtors depicting one-year home price changes. Appears to be all "green", in every single state, with the exception of the U.S. highest price real estate, Hawaii.

From Chuck Cowan:
According to the most recent FHFA data, below are the 1-Year Home Price Gains in each state for 2024. Freddie Mac's figures show an average home appreciation of roughly 4% nationwide last year. Delaying a home purchase over the past few years while "waiting for rates to come down" or "until the market cools off" has been a costly mistake for many. With rates now trending down, the housing market will remain strong in many parts of the country, as more buyers will make the decision to jump back in.

 

[GON]

Throw in a property tax chart for good measure:

 

[fdcg27]

So Ohio is in the top few states in the nation in price appreciation 2023 to 2024?
Would not have expected that.

 

[SC Maintenance]

I like Case Shiller and it is a good series - but you need to be careful. Its only part of the market and has inherent data issues. So under the never trust data you haven't manipulated yourself guise :

It does not include new construction
It does not include condo's
It lags by a long time
The data is constantly revised - due to the lag and constant data trickling in. Every month is revised with each new series. If you go back to the charts from the GFC, the info you had at the start of 2008 showing 2007, are very different than how 2007 shows up in a CS report from say 2010. In that case it was revised down. At other times it was revised up. Its not bad - they just use whatever data they have.

What CS actually does is simply compare homes that have resold. So say you bought a house 10 years ago for $300K, then sell it this year for $500K. That data goes into case Shilller. Your house is not in case shiller until it sells at least the second time.

As an aside somewhere, I heard the once formerly hot market of Austin is imploding.

https://www.newsweek.com/austin-home-prices-drop-50-percent-texas-housing-market-struggles-2018580

 

[alarmguy]

Home prices will always fall when interest rates go up.
The payment is the same. Low interest rates high price. High interest rates low home price.

 

[GON]

Home prices will always fall when interest rates go up.
The payment is the same. Low interest rates high price. High interest rates low home price.

Be a hasty student of home sale prices in the late 1970s and early 1980s where mortgage rates reached 18 percent, home prices did not fall in price whatsoever.

What did fall was the quantity of home sales, but not the price of the homes.

 

[SC Maintenance]

Be a hasty student of home sale prices in the late 1970s and early 1980s where mortgage rates reached 18 percent, home prices did not fall in price whatsoever.

What did fall was the quantity of home sales, but not the price of the homes.

Yes, third leg of the stool was inflation. Housing prices tripled in a decade - nominal. However I wonder how much was organic and how much was TINA - because stocks and bonds were huge loosers through that whole period?

 

[alarmguy]

Be a hasty student of home sale prices in the late 1970s and early 1980s where mortgage rates reached 18 percent, home prices did not fall in price whatsoever.

What did fall was the quantity of home sales, but not the price of the homes.

I would have to disagree at least in the circumstance of a sibling who purchased a large bayfront home on Long Island for $103,000 when interest rates were 15.5% or 16%
He had the house to negotiate on his own. There were no other buyers around.

In this immensely lodge country, we tend to forget individual areas have different market conditions

 

[GON]

Yes, third leg of the stool was inflation. Housing prices tripled in a decade - nominal. However I wonder how much was organic and how much was TINA - because stocks and bonds were huge loosers through that whole period?

All I know is that during this time small savings and loans that invested their customers savings in 30 year treasuries were very profitable in the following decades.

 

[GON]

Yes, third leg of the stool was inflation. Housing prices tripled in a decade - nominal. However I wonder how much was organic and how much was TINA - because stocks and bonds were huge loosers through that whole period?

All I know is that during this time small savings and loans that invested their customers savings in long term treasuries were very profitable (and very safe) in the following decades.

 

[SC Maintenance]

All I know is that during this time small savings and loans that invested their customers savings in 30 year treasuries were very profitable in the following decades.

If you bought bonds in the 70's you lost your shirt to inflation and depreciation (bond values are inverse of their yield).

The 40 year bond bull market started in 1981 and lasted until Covid. Its where guys like BIll Gross and El Erian made their fortunes - bought bonds and 15+% and rolled them for ever increasing appreciation for almost 40 years.

 

[Pablo]

Using Seattle to judge all of WA is a guideline at best, maybe not even that. Some areas, like Whatcom county/Bellingham blew right past 2022 on the way up

 

[GON]

Using Seattle to judge all of WA is a guideline at best, maybe not even that. Some areas, like Whatcom county/Bellingham blew right past 2022 on the way up

@Pablo , not all of us can live in Whatcom county (the Hamptons of Washington State).

 

[gfh77665]

They omit Houston? Houston is the 4th largest US city, way larger than Portland, Charlotte, etc.

 

[PandaBear]

Home prices will always fall when interest rates go up.
The payment is the same. Low interest rates high price. High interest rates low home price.

Depends on why the interest rates go up.

If it is due to hyper inflation it may not, but if it is due to a recession from market crash after leverage went bust, yeah it will fall. They also don't fall in the same amount everywhere. In 2008 the low income neighborhood in Bay Area fell 30-50% whereas the high income neighborhood fell 15-20%.

If you bought bonds in the 70's you lost your shirt to inflation and depreciation (bond values are inverse of their yield).

What didn't lose your shirt during the Nixon shock? Unless you were holding on to gold in foreign countries or in Japanese stocks you probably lose your shirt.

 

[SC Maintenance]

What didn't lose your shirt during the Nixon shock? Unless you were holding on to gold in foreign countries or in Japanese stocks you probably lose your shirt.

Housing. Silver. Other real assets.

See your own statement about hyper inflation above.

 

[SC Maintenance]

They omit Houston? Houston is the 4th largest US city, way larger than Portland, Charlotte, etc.

Excellent question. No Philadelphia either. There is an answer actually:

https://www.marketwatch.com/story/t...o-houston-and-why-thats-no-problem-2018-10-30

But even more importantly, unlike most states, Texas doesn’t allow public access to deeds, which is one of the easiest ways to populate an index with sales data, in order to derive prices. So Blitzer and his team struck a deal with a Dallas-based Realtor association to get data from their multiple listing service.


“And when it was all put together, the decision was that was a bit of a hassle, so we’d stick with one city,” he said. Also, “we had Boston, New York and Washington so we decided that was enough for the Northeast, with apologies to Philadelphia.