Home prices falling but remain very high, San Francisco negative from year ago
|Let's dive into the latest Case-Shiller Home Price report for a look at prices in 10 cities and nationally.
Home price synopsis
Home prices have peaked this cycle but the decline is certainly tiny compared to the run up.
Case-Shiller data lags. The latest data is from November and that represents sales primarily made in August, September, and October so the declines shown are undoubtedly understated by a lot, depending on the market.
Declines will accelerate but not fast enough to revive a housing market that has soured dramatically.
CS national, top 10 metro, CPI, OER Index levels
Chart notes
OER stands for Owner's Equivalent Rent. It it the price one would pay to rent a home, unfurnished and without utilities.
Home prices wildly disconnected from the CPI in 2000 and in 2013. The disconnect accelerated in 2020.
The Fed ignored all three occasions hoping to make up for "lack of inflation". The Fed "succeeded" beyond it's wildest dreams.
Rent, OER, Case-Shiller percent change from year ago
The year-over-year CPI has finally peaked this cycle as have home prices. I added a new chart to show year-over-year home prices in the 10 top markets.
Case-Shiller home prices percent change year-over-year
City differences
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Miami was still up 18.53 percent from a year ago having topped at 33.71 percent earlier in the year.
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Chicago is up 7.63 percent. It had the lowest year-over-year gain at 13.08 percent.
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San Francisco is the only city with a year-over-year decline. It's at -1.48 percent as of November.
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Eight of the ten cities are clustered from 4.45 percent (Los Angeles) to 8.13 percent (New York).
Don't dwell too much on the percentages because the data is stale.
But do compare Chicago and New York with their high taxes to Miami with low taxes. Prices reflect an escape from tax hell. Cities in California are joining that club.
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