Another look at the regions

As we enter the sixth year of a bearish US housing market, location continues to play a major role in the relative size and severity of changes in home prices across the United States. With the S&P/Case-Shiller 20-City Home Price Indices, Boston saw average home prices peak first in the mid-2000s (September 2005) and Charlotte last (August 2007). The two Composites were right in the middle. The 10-City peaked in June 2006 and the 20-City in July 2006.

Looking at the magnitude of collapse in terms of percent, Las Vegas has suffered the most. Average home prices in that market grew by 135% from January 2000 until its August 2006 peak, and as of February 2012 are down an astounding 61.7% from that peak. Prices in Las Vegas are more than 10% below their January 2000 levels, back to about the same values they averaged more than 15 years ago at the end of 1996. Three other Sunbelt cities, Miami, Phoenix and Tampa, 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 February 2012, the market had fallen by about 50.3%. Phoenix grew by 127% through its June 2006 peak, but has fallen by about 54.2%. Tampa was up about 138% at its July 2006 peak, and is down about 48% since then.

S&P/Case-Shiller Home Price Indices. Sources: S&P Indices and Fiserv.

Los Angeles and San Diego both grew by between 150% and 175%, and have both fallen by more than 40% through February 2012. While they did not grow as much as the Sun Belt states, Detroit (down 46.0%) and San Francisco (-42.9%) both saw peak-to-February collapses in excess of 40%.

As of February 2012, 14 cities and both Composites have fallen by more than 30% from their relative peaks and these are not confined to the Sun Belt. The Mid West has seen large price declines in Chicago (-37.5%), Detroit (-46.0%) and Minneapolis (-35.6%), the North West in Portland (-30.5%), San Francisco (-42.9%) and Seattle (-32.9%), and the South East in Atlanta (-39.0%) and Washington DC (-30.0). In 2011 Washington was one of the cities that appeared to be holding up relatively well, but as of February 2012 average home prices are still down 30% from their May 2006 peak.

With February 2012 index levels below 100, Atlanta, Cleveland, Detroit and Las Vegas are the markets where average home prices are below their January 2000 levels. Home prices in those markets have lost all of the appreciation in value of the past 12+ years. Doing relatively better, at -10.9% and -13.2% respectively, Dallas and Denver are the only markets covered by our indices where the declines from peak are below 15.0%.

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


  1. justin says:

    In my opinion these high cost markets are still proped up soley due to FHA high balance loan programs. This why NAR lobbied to keep it in place and why DoddFrank only allows risky 40y term loans in high cost markets. The power that be will do all they can to keep these markets inflated.

Post a Comment

Thank you for submitting a comment. We ask you to use the comment guidelines to promote thoughtful and productive discussions. Your comment will be approved before it will be posted. Thank you for your patience.

Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

  • Categories

  • Recent Comments

  • Tags