Are Real Home Prices Rising Or Falling Where You Live: Here's How To Find Out

Tyler Durden's picture

As we’ve noted time and time again, the fact that average national housing prices appear to have recovered from the peak of the housing bubble masks the uneven nature of America’s economic recovery: While certain popular coastal markets have seen prices recover, much of the south and Midwest have struggled with stagnation or even home-price deflation.

Now, a new tabulation of home-price data by Harvard University's Joint Center for Housing Studies provides a granular look at the unevenness of the recovery from county to county.  A quick glance at the map reveals how home-prices – a worthy proxy for wealth inequality – have risen dramatically along the coasts, while

The data show that home prices increased by 40 percent or more in 153 metros (16 percent), including twelve metros where home prices doubled. And in nearly 300 markets, prices increased - but more modestly—by less than 20 percent. Meanwhile, real prices declined in about 280 metros. In another 200 markets, prices increased by 20-to-39 percent.

San Francisco, Nashville and Pittsburgh are among the 15 percent of housing markets around the country where prices have actually risen above their prior peaks in the mid-2000s after adjusting for inflation. Less fortunate are Cleveland, Phoenix and much of Florida, where prices are still at least 26 percent below where they were before the bubble burst.

However, examining the data in real terms tells a different story: adjusted for inflation, home prices remain nearly 20% below their pre-crisis peak.

Americans curious to see how inflation-adjusted home prices are doing in various parts of the country, can find the answer courtesy of this interactive map from Harvard University's Joint Center for Housing Studies, which reveals what prices are doing in various parts of the country.

This is why William Wheaton, a housing economist at MIT believes the market hasn’t recovered yet: Because Americans who bought when home prices were at their highs are still effectively in the red.  He says not enough homeowners are "sitting on top of little nest eggs of equity and can say, 'Oh, you know, now we can go buy the house down the street we always wanted.' "

This process, which Wheaton calls “churn,” when people buy one home and selling another, hasn’t recovered, which is one reason for the sluggish recovery in homes sales figures.

"There's a lot of discussion right now about how sales should be more robust and they're not, given where we are in this stage of the economic recovery," he says. Americans are buying the same number of homes they were 18 years ago. And Wheaton says the population has grown since, so sales should be stronger.

Tight supplies are also in part due to this lack of churn as more people are choosing to stay put, leaving fewer available homes one the market.

Of course, as we’ve noted in the past, there are other factors at play: More millennials who are having trouble finding well-paying jobs are living with their parents for longer, delaying the process of having children and buying homes. Of course, in richer urban markets, this drop is being more than compensated for by wealthy foreigners hoping to stash their fortunes in US real estate, which they see primarily as a store of value.

However, all of these factors are really just symptoms of a larger issue: after nearly a decade of rock bottom interest rates, as Greg Kaplan, an economist at the University of Chicago puts it, the US economy still hasn’t gotten over the worst housing crash since the Great Depression. With central banks having literally thrown nearly $20 trillion at the problem, it is unclear what, if anything, will get it over the hump.

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Art Van Delay's picture

There's a boom in occupied mom's basements.

Ask any SJW.

2000's picture

Careful there. You might offend someone. [gasp]

toady's picture

Lots of interesting stuff here.... first, ATH 'S were, and continue to be, insane. 1200 square feet 3 bed 1 bath , built in the 50's  (no central air in Phoenix), in a drug/prostitution area, 1/4 mile from the end of the runway at the 5th busiest airport in the US,, sells for 300k?

When my uncle got that for that shithole I knew the end was nigh... do we really want to return to that?

Also I own multiple houses at this point... why sell when you can rent, get 5-15% on your money... a hell of a lot better than the financial system is offering. That's what is behind the "lack of inventory", that and the banks are STILL holding underwater inventory. I see one of the dozens of vacant houses in my area come back on the market every six months or so.... even after all this time...

Anyway, I  didn't want to go on and on.... sorry

Delving Eye's picture

"Will Whhheaton."  -- Stewie Griffin

Delving Eye's picture

"With central banks having literally thrown nearly $20 trillion at the problem, it is unclear what, if anything, will get it over the hump."

Killing central banks is a good start.

Kaleb's picture

Ahaaaaa....those poor little snowflakes. 

In my day, buying a home meant actually working, living on a budget, and saving money for a few years.

Those immediate "on demand" gratification needs are a bummer some times.

2000's picture

Yeah... but did you have avocado toast?

Paul Kersey's picture

New house prices are going up dramatically, because infill lot prices have skyrocketed, tract home lot development costs have keep rising and labor costs, alone, have pretty much doubled since 2011. Forget building new entry level houses, because labor and lot costs are just too high to enable contractors to build dwellings at entry level prices..

Mazzy's picture

I concur and this is especially true in the Balt-DC-Annap triangle. 

High demand, some of the wealthiest counties in the country, etc.  There's just no profit in building anything under 300k, and that's for a townhouse in a neighborhood that'll turn brown in a decade or so.

Labor isn't the only factor. Builders can't pay enough to attract skilled tradesmen.  Young guys can make middle class wages by their early 20's with just a couple years of OtJT, and by their late 20's can venture out with businesses of their own. 

Code compliance is prohibitive these days.  Just wait until next year and the typical townhouse is going to sport $3k worth of AFCI circuit breakers alone.  Then there's the new PEX plumbing, 20k in excavating and grading, the next SEER rating AC units every year, septic and sewage, and FEES FEES FEES for everything.

The Real Tony's picture

In Canada new home prices are more than double what they are in America. The reason is the Chinese are the only ones that can afford them and as they buy more and more the builders keep on raising the prices knowing full well the Chinese will keep on paying more and more. Prices were going up about 20 to 25 times the inflation rate for the past two to three years.

Michael Musashi's picture

They could if they pulled their head out of the sand. I recently drove from Maryland to California. Once you leave either coast, the level of entrepreneurship drops so dramatically it's startling and depressing. Middle America is so habitually reliant on franchises and big retailers it's a disturbing thought of what is about to happen to many of them. A better perspective, go to your local bookstore and ask what are some of the most popular books. I know for a fact, books about business and entrepreneurialism are not in the top 10. It's a sad state of affairs when Americans think their Walmart employment should allow them to afford a home.

I just hope that the millennials can save some of these places. The USA is a beautiful country, many places deserve to be saved.

MonkeyKnutz's picture

Calling Bunk on this one.  The slide show my area down up to -46%, and a guy at work just offered $20K over asking and lost the sale.  And the asking price is at the '09 levels.

But, with that being said, there are little to no houses on the market here, everyone is holding tight.

MonkeyKnutz's picture

Matter of factly, I just sold another house we owned in another state that is in the -46% range at '07 levels.  If i could figure out how to post a picture I could prove it....

BeanusCountus's picture

Keep hearing supply is tight. Supply is tight for a reason. Most states have property tax values "locked in" for long-term owners. All part of legislation disguising tax increases to balance future budgets. But re-set occurs for new purchasers, which would include the seller when they buy their new home. Sellers can not afford to move!!! So it's no surprise there is small inventory. Normal sellers can't afford to relocate, so they don't put their house on the market. Yet another example of .gov fucking up what should be mobility of America to go wherever they choose. All through taxation.

And I didn't even touch on the new sales taxes imposed on real estate in many states. By the time a seller pays commission, sales tax, etc, no one gets nearly the appreciation they invested for long ago. It's Criminal!!

And all in the name of "we need the money". Shameful, given all the things they currently tax people on.

Give Me Some Truth's picture

The graph is right for my area/state. Home prices are falling.

Cabreado's picture

Careful now... nobody touch that first domino...

Whodathunkit's picture

Here is the low down. FED bought BILLIONS of MBS. They had to reinflate housing prices so that they can start to "unwind" their balance sheet (making a tidy profit along the way). FOLLOW the money.

Stormtrooper's picture

Yeah, the consumer knows about inflation adjusted.  Their incomes have been inflation adjusted down too so that lower inflation adjusted house is still way out of reach.  Just like an MIT economist to leave out that piece of the puzzle.

mrvco's picture

We bought in Colorado at the bottom of the dip in 2011.  People around here pay more for scrapes now.

Paul Kersey's picture

I bought my house the Broadmoor section of Colorado Spring, Co for $135,000 in 1991. Sold it in 2006 for $600,000. Today, that house couldn't come close to selling for that $600,000 price.

XBroker1's picture

I moved to the area between Knox and Nash. They can't build homes fast enough here.

Stormtrooper's picture

Thinking about moving to that area.  Any one room log cabins on 200 acres still available, cheap.

whatswhat1@yahoo.com's picture

Granular.  Yeah right.  20-something buzz word, like disruption.  I zoomed in and had a good laugh at how inaccurate the data is.  North Chicago is lumped in with Lake Forest.  In order to get real numbers, one would have to drill down to neighborhoods or even individual streets.

alfbell's picture

Who would believe any study coming out of Harvard? Or data from a "housing economist" from MIT? 

HRH Feant2's picture

Pittsburgh. Who the fuck would choose to live in Pittsburgh?

Who wants to live in San Fran and wake up to find their car windows broken? Shit on the sidewalk? The smell of piss.

Urban centers are outdated. Those are scum places where no decent person wants to live.

aardvarkk's picture

Fargo, ND.  You don't get much more flyover than that.  But consider...Fargo never much participate in the boom/bust cycle.  I went to school across the river in the late 80s and have maintained relationships in the town since then.  5 or 6 years ago I moved back to town.  Until I got back, it was a steady if slow rise.  But it has accelerated, and I have sold two homes at an equivalent yearly return of something like 10 pct for the years I lived in them.

Stoic people here, who value stability.  But unlike the dot com boom and 2007, people here are starting to take chances.  I don't like it.

Which is why after 25 years as a homeowner, I am now starting a lease in an apartment.  I don't want to be holding a mortgage when this goes down.  I just sold a fairly nice house in Fargo for what I could have paid for a home on Lake Minnetonka (near Minneapolis) in about 1996 or 7.  That is not a healthy, balanced real estate market and I want no part of anything in it that I can't get out of cheaply.

Francis Marx's picture

This map is wrong. It shows my area negative and I know for a fact my area is mostly positive since 2000. My street is double.

BeanusCountus's picture

Can I ask what price range? And how many of them are moving?

PitBullsRule's picture

All you deplorables have been bad-mouthing real estate for the past 5 years, and meanwhile I've made more money than I ever made my entire life, on real estate.

No wonder you guys are deplorable!

amadeus39's picture

thanks for that wonerful "fact."

 

SeattleBruce's picture

You didn't 'make money' - you got a windfall from the FED.  The average Joe is suffering.  Yeah, figures you don't care.