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America’s Magnificent Housing Bubbles: A November Update

Home price inflation pandemic.

From Wolf Richter to WOLF STREET.

Home prices jumped 7.0% in the United States, according to the Case-Shiller house price index published today. Other indices show a similar jump in prices. Housing prices are going crazy despite the terrible economy. They are fired by low interest rates, $ 3 trillion in liquidity that the Fed has thrown into the markets, fear of inflation that drives people into hard assets, work from home that makes people look for more space, insistence on buying now, before putting the current home on the market, and moving from apartments for rent and apartments in high-rise buildings to detached houses. And the apartments, as we will see in a moment, are not universally hot.

Prices of houses in Los Angeles:

Housing prices in the Los Angeles subway in September jumped 1

.3% since August and 7.7% since September last year. Now they are 12.9% above the peak of the completely crazy Housing Bubble 1, almost doubled (+ 93%) since the beginning of 2012 and tripled more than three times since January 2000 (+ 209%) :

The Case-Shiller index is set at 100 for January 2000 in all 20 cities it covers. Today’s value of the Los Angeles index of 309 means that house prices have risen by 209% since January 2000. This makes Los Angeles the most magnificent housing bubble on this list.

For Los Angeles, the Case-Shiller index provides sub-indices for homes as well as segments of high, middle and low-end homes. In the low-end segment (black line) – where people can least afford to raise prices – prices have risen by 10.2% since September last year, increasing almost fourfold since January 2000 (+ 280 %). During Hubing Bubble 1, the lowest level went up the most, and during Busting Bust, it went down the most, -56% from the top to the trough. High quality prices (green line) increased by 7.6% compared to the previous year and increased by 186% compared to January 2000:.

The Case-Shiller home price index avoids some of the distortions inherent in average price and average price indices, as it is based on “sales pairs”, comparing the selling price of a house sold in the current month with the price of the same house, when it was sold before, and has been doing it for decades. Today’s September issue is a moving quarterly average of the closures that went public in July, August and September. So this is the time frame we are looking at.

Prices of houses in San Diego:

The Case-Shiller index for the San Diego subway jumped 1.8 percent in September from August, up 9.5 percent from a year ago:

This is “House price inflation”: Loss of purchasing power of the dollar.

Because the Case-Shiller index compares the selling price of a house in the current month with the price of the same house when sold before, it keeps track of how many dollars are needed over time to buy the same house. In other words, it measures the purchasing power of the dollar in relation to houses. This makes the Case-Shiller index a measure of “house price inflation”. And that’s all it really is – the loss of purchasing power of the dollar in relation to houses.

San Francisco Bay Area:

Housing prices in the San Francisco Bay Area in five counties – San Francisco, San Mateo (northern Silicon Valley), Alameda and Contra Costa (East Bay) and Marin (North Bay) – rose 1% in September from August and 6.0% from a year ago. The index has more than doubled since 2012 and has almost tripled since 2000:

But apartment prices in the Gulf region of five counties fell for the fourth month in a row and are 2.3% lower than a year ago and are back where they were in March 2018. Apartment prices in San Francisco itself are fell much further amid a historic record oversaturation of all time, with the average price falling 12.8% year on year. But the Case-Shiller index covers a huge area around the bay, including those relocating San Francisco refugees, and some of them are seeing rising apartment prices:

Prices of the house in Seattle:

The Seattle Metro Case-Shiller jumped 1.2 percent in September from August and 10.1 percent year-on-year. It has more than doubled since 2012 and is 46% higher than Housing Bubble 1:

New York Condo prices:

The Case-Shiller area for its index in New York includes numerous counties in the state of New York, New Jersey and Connecticut “with a significant population that usually travels to New York for employment.” This area is far more diverse than Manhattan itself. The prices of the apartments in this huge metro are essentially equal since September 2017 and are 2% lower than the peak in October 2018:

Prices of a house in Portland:

Portland subway housing prices have jumped 1.3% in August since September and 7.6% year-on-year and have doubled since 2012:

Prices of a house in Miami:

Miami subway housing prices rose 1.0 percent in September from August and 5.6 percent a year ago. The index is getting closer to its absurd Housing Bubble 1, missing only 7.4%:

Prices of a house in Tampa:

The Tampa Case-Shiller Index jumped 1.4 percent in September from August, up 7.5 percent from a year earlier, surpassing its previous crazy bubble of 2006:


Washington subway housing prices jumped 1.0 percent in September from August and 7.0 percent year-on-year, but are only slightly shy from their Housing Bubble 1 peak:

Prices for Boston House:

Boston subway house prices jumped 1.5 percent in September from August and 7.7 percent year-on-year:

Prices of a house in Denver:

Denver subway housing prices rose 0.6 percent in September from August and 6.0 percent year-on-year. Beautiful housing balloon 2, but not much of a balloon housing 1:

Prices for house Phoenix:

Housing prices in the Phoenix subway jumped 1.9 percent in September from August and 11.4 percent year on year, the hottest housing price inflation in all markets on this list of Splendid Housing Bubbles. But the index remained at 4% of its Housing Bubble 1 peak in 2006:

Prices of houses in Las Vegas:

Las Vegas subway housing prices rose 0.8 percent in September from August and 5.4 percent year-on-year. But they remain 12.6% lower than their absurd peak Hubing Bubble 1:

Prices of a house in Dallas:

The Dallas Metro Case-Shiller Index – Colin, Dallas, Delta, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Rockwall, Taranto and Wise – rose 0.9 percent in September from 2.6 percent year-on-year. year, the coolest housing price inflation in this list of the most beautiful housing bubbles:

Dallas is also the last entry on this list, with house prices having “doubled” since 2000, meaning housing price inflation is 100% in 20 years. The other cities in the 20-City Case-Shiller index have experienced below-100% housing price inflation over the past 20 years and have not declined.

Jobs everywhere, unemployment crisis, oil bust, people chasing a cheaper place with fewer people to live, the land is in a hurry to buy housing Read… I am amazed at how quickly rents are rented in San Francisco, New York, Boston, Los Angeles and other expensive cities. Rents are falling even in Houston and Dallas. The national average turns out to be negative

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