Regional differences

With each monthly report, we have seen both similarities and differences in regional home price behavior during the recent crisis. As detailed in the graphs below, the Sun Belt cities saw the largest increases in prices in the early-to-mid 2000s and some of the largest percent declines in the past five and one-half years.

When you look at the magnitude of collapse, Las Vegas is the market that has suffered the most. That market had grown by 135% from January 2000 until its August 2006 peak. Average home prices are now down a staggering 61.1% from their peak. Average home prices in Las Vegas are almost 10% below their January 2000 levels, back to about the same values they averaged almost 15 years ago in the middle of 1997. Miami and Phoenix are not far behind. When they reached their peak in December 2006, Miami home prices had grown by about 180% from January 2000. As of November 2011, the market had fallen by about 51%. Phoenix grew by 127% but has fallen by about 55.5%.

S&P/Case-Shiller Home Price Indices.

Los Angeles, San Diego and Tampa all grew by between 135% and 175%, and all have fallen by 40% or more through November 2011. While they did not grow as much as the Sun Belt states, Detroit (down 44.4%) and San Francisco (-40.2%) have both seen peak-to-November collapses in excess of 40%.

As of November 2011, 12 cities and both Composites have fallen by more than 30% from their relative peaks and these are no longer confined to the Sun Belt. The Mid West has suffered in Chicago
(-33.3%), Detroit (-44.4%) and Minneapolis (-33.8%), the North West in San Francisco (-40.6%) and Seattle (-31.0%), and the South East in Atlanta (-34.8%).

With November 2011 index levels below 100, Atlanta, Cleveland, Detroit and Las Vegas are the markets where average home prices are below their January 2000 levels, meaning home prices have lost all of the appreciation in value of the past 11+ years. Doing relatively better, at -9.9% and -11.0% respectively, Dallas and Denver are the only markets covered by our indices where the declines from peak only about -10.0%, but still a double-digit reading.

The posts on this blog are opinions, not advice.
Please read our disclaimers for Ratings Services, Indices, Equity Research, Securities Evaluations and Risk Solutions.

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