Home Prices Best in 25 Years, Better Prices Still Coming

Here are some charts showing nominal and real (CPI inflation-adjusted) housing declines in 20 Case-Shiller metro areas. Charts are grouped by 10 least expensive and 10 most expensive areas. Additional tables show housing declines from the peak. An explanation follows the charts.

Charts and tables are courtesy of “TC”.

Case-Shiller Nominal Price History 10 Least Expensive Metro Areas

 Home Prices Best in 25 Years, Better Prices Still Coming

click on any chart or table for a sharper image

Case-Shiller Nominal Price History 10 Most Expensive Metro Areas

 Home Prices Best in 25 Years, Better Prices Still Coming

Case-Shiller Nominal Price Declines Since Peak
 Home Prices Best in 25 Years, Better Prices Still Coming

Case-Shiller “Real” Price History 10 Least Expensive Metro Areas

 Home Prices Best in 25 Years, Better Prices Still Coming

Case-Shiller “Real” Price History 10 Most Expensive Metro Areas

 Home Prices Best in 25 Years, Better Prices Still Coming

Case-Shiller “Real” Price Declines Since Peak

 Home Prices Best in 25 Years, Better Prices Still Coming

TC writes …

Mish, I’ve attached several Case-Shiller graphs based upon most recent Case-Shiller data.

The charts show that all 20 metros are down from the peak prices between -10.7% (Dallas) and -58.6% (Las Vegas). Note that 13 of 20 cities tracked are presently at the lowest point in the cycle, while 7 cities are presently higher than their early 2009 low.

Of the 7 cities that are higher, San Francisco leads the way at +10.3% (+$43,461). However, San Francisco it still an amazing -40.6% (-$317,790) below peak prices.

Of particular interest is the “Price Level” column which displays how far back prices have reverted. For example, you can see that Atlanta has reverted back to April 1999 prices (and keep in mind this is nominal!). Three-fourths of the US is at the lowest point in the cycle, while 1/4 is up modestly and most likely temporarily.

The fourth chart is of March 2011 real (inflation adjusted) data. It is sorted identically to chart one and again shows that all 20 metros are down from their peak prices with again Dallas in the best shape (-21.6%) and Las Vegas the worst (-63.2%). It also shows that in real terms only 2 of 20 metros are actually higher than their early 2009 low and that both are only up +2.7% (and both still have huge declines of -47.4% and -35.3%).

The remaining 18 metros are all at their lowest point in the cycle. Again, the “Price Level” column is of interest as it shows that 10 of metros are down to levels never seen before in real terms (noted with an asterisk) and have resulted in a “lost” 20+ years of home appreciation. Long story short, housing has collapsed across the country and in real terms national pricing is back to late 1987 pricing – ouch!

I should also mention that this is based upon the latest Case-Shiller data, but many of these homes sold in very early 2011 since it typically takes 45 – 60 days to close and get recorded. So actual current prices (June 2011) are likely even lower and with the lowering of the GSE limits around the corner, we’ll likely see even further declines.

On a positive note, prices today (especially when you account for near historic low interest rates) are the best they’ve been in 25+ years. While prices are still likely to head lower all markets have already experienced the majority of both their real and nominal price declines (i.e. San Francisco is already down in real terms -$420,000 and with median prices at $465,900 another -$420,000 is impossible). That being said, patience will still likely be rewarded with lower prices and maybe even lower interest rates. Time is on the renters side.

Mike “Mish” Shedlock

http://globaleconomicanalysis.blogspot.com

 

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I am a longtime real estate agent who has pretty much seen it all during the housing boom as bust. With experience in selling high-end property and low-end foreclosures, raw land, short sales, development work, apartment buildings, and working with investors, I bring a well-rounded perspective to my work.I also have started to do some paid real estate consulting. If you have questions or just need some good real estate advice, book an appointment at http://whattodorealestate.com/In addition to selling real estate, my insights have been featured in The New York Times, The Big Picture, and regularly on Patrick.net. I have also done consulting work with ForeclosureRadar.Starting my career, in 2003, I have sold homes throughout Alameda and Contra Costa counties, specializing in Danville, Alamo, Blackhawk, San Ramon, Dublin, Pleasanton, Walnut Creek, Lafayette, and Orinda. I live in Danville with my three kids.


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One thought on “Home Prices Best in 25 Years, Better Prices Still Coming

  1. E. Keith Owens

    ……..The Denver market is still 3.2 percent below its low-point giving us a bit of wiggle room to avoid the double dip that 11 other cities already are experiencing.

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