Housing Market Update, 11/30/20

Today we are going to look at a few charts using the Case Shiller Home Price Index for a few markets across the US.

These charts will give us a visual representation of just how bad the housing bubbles are.

We will look at a few cities out West, a couple in Florida, New York, DC, Boston, and Dallas.

The first chart shows Los Angeles. The Case Shiller Home Price Index has tripled since 2000 and almost doubled from the low it put in just a few years ago.

Real quick. One thing you'll realize with all of these cities except for maybe Dallas -- is that residents are moving out of them. They are trying to escape homelessness, crime, and seek out cheaper areas to live. The bubbles in these cities are not sustainable.

I know here in Vegas, we're seeing an influx of people from California coming in and outbidding everybody for homes. So they are spreading the bubble to other areas. What happens when that ends?

Here we see how different types of homes do in a bubble. Low tier homes did the best in the first housing bubble and they are doing the best now. At the peak of our last bubble, we saw low tier homes far outpaced condos and higher tier homes. Exactly what we're seeing now.

San Diego also has almost tripled since 2000. Not only has the price far exceeded the last bubble, we haven't even seen this market see a topping formation.

Here is San Francisco Bay Area. Looks like we were topping since 2018 until this last push we've had. Unlike San Diego and Los Angeles, San Francisco had a shallow 30% correction.

But this is the area that may be the most vulnerable to a crash in the next downturn. Not only was their correction shallow after the Great Financial Crisis. Many of the tech workers in Silicon Valley can now work from home -- allowing them to move further out for more space, cheaper places to live -- like Lake Tahoe.

Here is Seattle. Another area with a shallow correction. This bubble is already 46% higher than the last peak.

Here are New York condos. Only a 17% drop from its first bubble peak. Just like San Francisco. Work From Home is going to tear this market apart -- as residents flee high taxes, high house prices, homelessness, and crime.

The Portland bubble has jumped 39% since the last peak. The drive up in prices could be due to Californians leaving for Portland.

Regardless, there's no way that these prices are sustainable.

Miami's first housing bubble was insane. The price more than doubled in a short 4 year span. The Housing Bubble 2.0 price hasn't even recovered. In fact, that area above the red line represents about 2 years. So if you had bought a home in Miami at any point during those two years From 2005 to 2007-- there's a good chance that you are under water.

Tampa's price has just barely gotten above it's prior bubble peak.


The same with Washington DC. Looks like the price just keeps stair stepping it's way up.

Boston is now 32% higher than it's last peak after having a shallow correction.

The prices of homes in Denver have exploded during Bubble 2.0. A 69% jump.


In these next two charts, we'll see both Phoenix and Vegas having had deep 50% plus corrections and still below their prior peak.

Here is Phoenix and here is Vegas.

I am going to end with Dallas. The chart looks like Denver. A shallow correction and a huge jump. That is what happens when there's an influx of people moving into your city.

The housing bubbles are not the same in all areas of the country. With the California exodus looking like it is picking up steam, it looks like LA, San Diego, and San Francisco are going to have the biggest busts in the upcoming housing crash.

Thank you for listening, I appreciate all of you that watch my videos. If you live in a city not already covered here, please let me know what the housing situation is in your neck of the woods.

Graphs come from https://wolfstreet.com/2020/11/24/the-most-splendid-housing-bubbles-in-america-november-update/