October 30, 2007 2:55
The real estate bust in all its many colors
The headline number in the S&P/Case-Shiller Home Price Indices released this morning was that U.S. home prices dropped 4.4% in the 12 months ending in August. But it's in the metropolitan-area details that the Case-Shiller data gets really interesting. So with the help of Time.com graphics whiz Feilding Cage, I charted them:
Pretty cool, huh? What's fascinating is how the different metro areas segregate themselves into pretty clearly delineated categories.
There are the bursting-bubble metros, which on the chart start with L.A. and end with New York. Within that group there are some pretty interesting differences: L.A. and Miami peaked higher and later than the rest; Phoenix was just moseying along well outside the bubble zone until mid-2004, after which prices almost doubled in just two years; San Francisco and New York saw steadier (and possibly less bubblicious) gains than the rest.
Then you've got Seattle and Portland, which have seen substantial if not staggering price gains and are still living in their own happy, Northwestern alternative reality in which the real estate bust is just something you read about in your favorite newsweekly.
Then there are the three mini-bubble metros: Boston, Chicago and Minneapolis.
Finally, there are the metros, all in the South and Midwest, that never really participated in the post-2000 house-price boom. Most are doing okay, but Detroit and Cleveland--for reasons that have more to do with problems in the manufacturing sector than with problems in the real estate business--are not.
Update: A commenter over at Barry Ritholtz's place wonders if maybe the chart should be viewed through 3D glasses. I just tried, and it did seem to make some of the lines jump out of the page. Mainly, though, it just made my eyes hurt.
Update 2: It turns out that one Tim Iacono is the true pioneer of the multicolored Case-Shiller chart. (Actually, Excel puts it in all those pretty colors automatically, but he was the first I know of to post the result online.)
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Justin Fox is TIME's business and economics columnist. This is his blog. About the Authors
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Reader Comments (13)
I cannot reconcile a chart like that with the phrase "bust". It seems that prices have pulled back somewhat, but we should understand that the prices were increasing at a dramatically unsustainable rate.
Has real-estate busted simply because the prices are no longer appreciating at an unsustainable clip?
The average price for a home in most of these cities are still nearly as high as they have ever been.
Maybe I am missing something but have we been enjoying such smooth economy for so long that there mere absense of of incredible appreciation counts as a "bust"?
Posted by Clay | October 30, 2007 3:34 PM
It all depends on when you bought your house, but I would think that in those metro areas that were experiencing double-digit annual gains, a 5% to 10% decline sure feels like a bust.
Still, in the UK and the Nordic countries in the early 1990s, prices went down something like 30% to 50%. So you're right that we haven't seen anything like that yet.
Posted by Justin Fox | October 30, 2007 4:30 PM
And if you took on a mortgage you couldn't afford, with the expectation that rapidly rising values would bail you out, it was a real bust. And, of course, various part of the mortgage and financial community essentially made this same bet, so we have the so-called subprime mess (which for various reasons goes beyond subprime).
Posted by Peter Varhol | October 30, 2007 5:08 PM
There is no subprime mess. Housing is still too high for many people to afford. There are more hosues on the market, but people are still not making enough money to come and buy them for cheap. Once the economy picks, if the economy picks up, housing will become a good investment once again.
Posted by Yadgyu | October 30, 2007 6:20 PM
I'd like to see this for the time frame after all the credit and loans were being tightended (Aug/Sep 07).
Posted by Atlanta renter | October 31, 2007 11:26 AM
The chart is through August. The Case-Shiller September numbers won't be out for another month.
Posted by Justin Fox | October 31, 2007 11:31 AM
If you add Sacramento region (California central valley)and San Bernardino/Riverside (California Inland Empire) you will get a better picture of what is happening to real estate in Ca.
Posted by realitor | October 31, 2007 11:58 AM
The markets above are the only ones for which S&P/Case-Shiller publish data. And all the other data sources (NAR and OFHEO, mainly) suffer from limitations that make them less-than-strictly comparable to those of Case-Shiller.
Posted by Justin Fox | October 31, 2007 1:47 PM
makes my head ache just to try and look at the graphs and colors... someone fix it... please..or just give us the tables we will plot this thing ourselves
Posted by swami | October 31, 2007 9:43 PM
You can download the Excel spreadsheets here
Posted by Justin Fox | October 31, 2007 10:09 PM
holy cow, LA real estate is only up 260% since 2000, OMG it's the end of the world....
Posted by patski | October 31, 2007 11:15 PM
A graph dating all the way back to 1987 would be sweet!
Posted by Fred Sambo | November 15, 2007 1:45 AM
I cannot reconcile a chart like that with the phrase "bust". It seems that prices have pulled back somewhat, but we should understand that the prices were increasing at a dramatically unsustainable rate.
Has real-estate busted simply because the prices are no longer appreciating at an unsustainable clip? ameliyat oyunları
The average price for a home in most of these cities are still nearly as high as they have ever been. 2 kişilik oyunlar
Maybe I am missing something but have we been enjoying such smooth economy for so long that there mere absense of of incredible appreciation counts as a "bust"? oda oyunları
kız oyunları
Posted by oyunlar | May 24, 2008 8:28 AM