The Most Splendid Housing Bubbles in America: “House-Price Inflation” out the Wazoo, Ignored by CPI. April Update
The only exception: condominium prices in the San Francisco Bay Area are lower than they were a year ago.
By Wolf Richter for WOLF STREET.
House prices rose 12.0% year over year, the largest increase since February 2006, near the height of housing bubble 1, according to today’s National Case-Shiller House Price Index for “February”, which reflects the three-month average of sales in December, January and February recorded in public records.
A measure of “house price inflation”.
The Case-Shiller Index compares the selling price of a house in the current month to the price of the same house when it was previously sold. This “sell pair method” tracks the amount it takes to buy the same home over time. Home improvement are included in the methodology. This makes the index the most suitable measure of house price inflation in the United States.
The consumer price index (CPI), on the other hand, measures the property inflation component based on rents. The CPI for “equivalent home owner’s rent”, which is around 25% of the total CPI, is based on homeowners’ estimates of how much their home would rent, which is 2.0% up on the previous year (green line) on property price inflation as measured by the Case-Shiller index (red line):
Los Angeles – the grandest # 1 real estate bubble:
The Case-Shiller Index of single-family home prices in the Los Angeles subway rose 1.3% in February versus January and 12% year-over-year. The Los Angeles index value of 325 indicates that subway housing prices have increased 225% since January 2000, making Los Angeles the grandest housing bubble on this list.
Low house prices have exploded in the past few years, which they did during Housing Bubble 1 and then collapsed the most during Housing Bust. Year-on-year, the low prices are up 12.9% and have quadrupled since 2000 (black line in the graph below).
Medium prices increased by 12.7% and high prices by 11.8%. But the prices for condominiums (red line) rose by “only” 5.9% year-on-year:
House prices on the San Diego subway rose 2.9% in February versus January and 17.0% year over year. This makes it the market with the second warmest annual house price inflation on today’s list of prettiest apartment blocks behind Phoenix. Prices have more than tripled since 2000 (+ 210%):
Seattle house prices rose 2.4% in February versus January and 15.4% year over year. This makes Seattle the subway with the third warmest annual house price inflation after Phoenix and San Diego. Prices have tripled since 2000 (+ 200%):
The following charts correspond to those of Seattle, San Diego, and Los Angeles. If we go through the list, the amount of white space grows above the price range, indicating that the other metros have seen slightly lower house price inflation over the past 20 years.
San Francisco Bay Area:
House prices in the five-county San Francisco Bay Area rose 2.1% in February versus January and 11.0% year over year. They have almost tripled since 2000 (+ 198%). The Case-Shiller Index includes the counties of San Francisco, San Mateo (northern part of Silicon Valley), Alameda and Contra Costa (East Bay), and Marin (North Bay):
Condo prices in the San Francisco Bay Area rose 1.1% in February from January, roughly the same seasonal increase from January, which is generally the bottom of the year. Condominium prices fell 0.7% year-on-year. This was the ninth consecutive month of year-on-year declines, so the index was below the value it had first reached in March 2018:
New York Subway:
Condominium prices on the huge New York subway (New York City plus numerous counties in the states of New York, New Jersey, and Connecticut) it rose 0.5% for the month and rose 1.2% year over year, but stayed roughly the same receive the same range since the end of 2017:
House prices on the New York subway, it rose 0.6% in February versus January, the smallest month-to-month increase since last July after the blistering spike late last year. Year-on-year real estate prices rose by 11.6%:
House prices rose 1.0% month-over-month and 11% year-over-year, and have increased 176% since 2000. However, they are still below the insane high point of Housing Bubble 1:
The Portland subway property prices rose 1.3% for the month and 11.4% year over year:
In the Washington, DC subway, property prices rose 1.0% for the month and 11.1% year-over-year:
House prices on the Boston subway rose 0.9% for the month and 13.7% year over year. Not included here: Condominium prices that “only” increased by 4.0% compared to the previous year:
Property prices rose 1.3% month-over-month and 12.7% year-over-year:
Real estate prices rose by 1.8% during the month and increased by 11.2% compared to the previous year:
House prices rose 2.0% m / m and a further 17.4% year-over-year, giving the Phoenix Subway the hottest annual house price inflation among the Splendid Housing Bubbles ahead of San Diego and Seattle:
Property prices on the Las Vegas subway rose 1.0% for the month and 9.1% year over year:
House prices on the Dallas subway rose 1.4% month-over-month and 10.9% year-over-year, and have increased 116% since 2000, meaning house price inflation has been 116% over the past 20 years. In the remaining cities in the 20-city Case Shiller Index, 20-year house price inflation was below 100% – for example, 20-year house price inflation in Chicago is 56%. That makes Dallas the last entry on this infamous list of the most gorgeous apartment blocks in America:
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