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
-
Miami was still up 18.53 percent from a year ago having topped at 33.71 percent earlier in the year.
-
Chicago is up 7.63 percent. It had the lowest year-over-year gain at 13.08 percent.
-
San Francisco is the only city with a year-over-year decline. It's at -1.48 percent as of November.
-
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.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.