But the low prices for single-family homes on the vast New York City subway are skyrocketing 15%, fueled by fleeing Manhattanites?
By Wolf Richter for WOLF STREET.
The headlines are everywhere: the real estate market has gone crazy with ridiculous bidding wars and ridiculous price increases. Record low interest rates last year and $ 3 trillion from the Fed’s miracle moolah sparked this phenomenon, along with people leaving some large, expensive cities for the suburbs, outskirts and distant places whose prices rose under the influx while many Graduates Didn’t Still, they put their vacant old houses on the market in hopes of spurring price hikes and thereby reducing inventory for sale. But not all things are created equal, as we’ll see in condos and houses by price tier in the San Francisco Bay Area, Los Angeles, and the New York Subway, based on today’s S&P CoreLogic Case-Shiller Price Index for Homes.
Condominium prices in the San Francisco Bay Area are falling.
Condo prices in the five-county San Francisco Bay Area fell 1.2% in January versus December, the eighth straight month of monthly declines. The index is down 1.5% from January last year, 5.1% from its high in May 2020, and roughly back to February 2018:
The Case-Shiller Index for “San Francisco” includes the counties of San Francisco, San Mateo (northern part of Silicon Valley), Alameda and Contra Costa (East Bay), and Marin (North Bay). It does not include the southern part of Silicon Valley, including San Jose, and most of North Bay (wine country counties Sonoma and Napa) and Solano Counties.
In San Francisco County, condominiums make up the majority of the market. In the other counties, houses are the majority.
Quite a few people have moved from San Francisco to the outskirts of the Bay Area. The move to Marin County is canceled because it is in the index. But people have also moved to other counties not on the index, such as Sonoma County, whose real estate market is hot in part due to the influx of people from San Francisco.
The prices of all single-family homes in the five-county San Francisco Bay Area increased 0.2% in January versus December and increased 9.5% year over year. According to price levels:
- Low prices (black line) fell 0.4% in January from December, the first month-to-month decline since 2019, after rising the most in 2020. The decline in January reduced the year-on-year gain to 10.8% (from 11.4% in December)
- The high prices remained unchanged in Decemberand increased by 7.9% compared to the previous year.
- Average prices rose 0.4% in January from December and increased by 10.8% over the previous year.
Los Angeles condo prices left behind by real estate prices.
Single-family home prices on the Los Angeles subway rose 1.0% from December in January and 10.8% from January 2020. Different developments can be seen according to price levels:
Low house prices show by far the biggest rises during the booms and by far the biggest slumps during the busts, having collapsed 56% from the top of Housing Bubble 1 to the bottom of Housing Bust. Since then, they have skyrocketed 163% and have nearly quadrupled since January 2000. In January, low prices rose 1.4% compared to December and 10.4% year-on-year.
Senior real estate prices are the least volatile. They have “not even tripled” since January 2000 (that sounds crazy). During the real estate bankruptcy they only fell by “33%” and have increased by “only” 84% since then. In January they rose by 0.9% compared to December and by 8.7% compared to the previous year.
The prices for condominiums rose compared to the previous month by 0.6% and compared to the previous year by 5.2%, which corresponds to about half of the price increases for medium- and low-level houses compared to the previous year.
New York subway condominium prices are still tied to bandwidth.
The Case-Shiller Index for New York City includes New York City and numerous counties in the states of New York, New Jersey, and Connecticut. This is a huge and diverse market.
Condominium prices in the area rose 0.5% in January versus December and rose 1.7% year over year. They’ve stayed in the same narrow area since January 2018, speckled with some major up and down movements:
Low-ranking house prices on the New York subway rose 1.4% in January versus December and 14.9% year over year. This includes homes in lower-priced areas of the market that Manhattan graduates have rushed to, causing prices to rise.
Average house prices rose 11.2% year-on-year. Senior home prices rose 11.3%; In the past few months, high prices have started to top Housing Bubble 1’s high. But condos didn’t participate in the price hikes that homes reveled in.
The map is on the same scale as the corresponding Los Angeles and San Francisco maps to show how much faster prices have risen on the two California subways over the years than the New York subway. But since 2020 real estate prices have been burning across the board in the New York subway, but condominiums are not:
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