The Case-Shiller indices are incredibly useful because they measure the ACTUAL appreciation of home prices using transaction pairs. But the city-level data often gets overlooked in favor of the National or 10 & 20-City Composite indices, which is a mistake — especially in the current, highly-disparate residential real estate market.
Real estate is a local business, so we thought it would be useful to look carefully at the big 20 city indices that Case-Shiller always provides. The results are very disparate: some cities are already setting new home price records, while one has yet to see prices bottom; some cities saw prices fall 13% peak-to-trough, while others were largely unphased.
All in, there is no evidence of a ‘crash’, but clear evidence of a modest ‘correction’ that in most places has already seen a ‘recovery’.
Setting New Peaks
Five cities set new index peaks in April 2023:
- Atlanta
- Chicago
- Cleveland
- Detroit
- New York
Think about what that means: in these cities, prices are higher today than they were in mid-2022. And it isn’t that they didn’t boom during the pandemic: the average increase in their indices between Dec-2019 and Dec-2021 was 26%.
Turnaround Stories
Over the last few months, most of the hardest-hit markets have seen home prices bottom and begin to rebound:
- Dallas, Las Vegas & Seattle all bottomed in March 2023 and saw their first MoM increase in April 2023 (after 9–10 months of declines)
- Detroit, Minneapolis, New York, San Francisco and Portland all bottomed in February 2023 and saw their first MoM increase in March 2023.
- Denver, Los Angeles, San Diego, Tampa and Washington D.C. all bottomed in January 2023 and saw their first MoM increase in February 2023.
Phoenix Stands Alone
In April 2023, 19 out of 20 big cities posted MoM increases in their respective Case-Shiller home price indices. That leaves one: Phoenix.
Home prices in Phoenix peaked in July 2022 and have declined in each of the last 9 months. That said, the total decline so far is just 8.5%, a modest correction compared to the 56.5% increase in the index between Dec-2019 and Dec-2022.
Moreover, the MoM decrease in April 2023 was just -0.1% (compared to -1.3% in December 2022 and -0.9% in January 2023). It seems likely that Phoenix will move into positive territory in the Case-Shiller data for May 2023.
Below we’ve got summaries for each of the 20 big cities tracked individually by Case-Shiller. As you look at the data, please keep in mind that:
- An index level of 307.87 (Boston’s for April 2023) means that home prices have tripled (3.08x) since January 2000 (the base year where the index = 100).
- A MoM move of ~1% is big. That’s ~12% annually if the same pace of growth (or decline) continues for the next 12 months.
- The charts are only looking at the last 2.5 years, which exaggerates the magnitude of the decline for cities like Seattle. For perspective, compare the ‘decline from peak’ to ‘increase since-2019.’
- If prices have increased 35% since end-2019 (such as for Boston), that means that the average annual growth rate for 2019-April 2023 is roughly 10%. That’s an investment we’d take any day.
ATLANTA
April 2023 Index: 232.37 (+0.9% MoM, +3.5% YoY)
Price decline from 2022 Peak: None — new record levels
Price increase since end-2019: +49.1%
Active inventory since end-2019: -46%
Atlanta had a mild decline in prices in 2H 2023, but prices bottomed in December 2022 and have risen MoM for 4 months straight.
BOSTON
April 2023 Index: 307.87 (+1.5% MoM, +0.8% YoY)
Price decline from 2022 Peak: -1.3%
Price increase since end-2019: +35.7%
Active inventory since end-2019: -32%
Boston prices peaked in June 2022 and then dropped a total of 3% before bottoming in December 2022. April 2023 saw a dramatic increase in prices.
CHARLOTTE
April 2023 Index: 257.95 (+1.4% MoM, +3.5% YoY)
Price decline from 2022 Peak: -1.4%
Price increase since end-2019: +53.1%
After a modest 4% decline in 2H 2022, Charlotte home prices are close to setting new highs after rising dramatically the last two months.
CHICAGO
April 2023 Index: 188.60 (+0.9% MoM, +4.1% YoY)
Price decline from 2022 Peak: None — new record levels.
Price increase since end-2019: +30.1%
Active inventory since end-2019: -59%
After a less than 1% decline in 2H 2022, Chicago prices have moved up 0.9% MoM in both March and April 2023.
CLEVELAND
April 2023 Index: 174.92 (+1.8% MoM, +2.9% YoY)
Price decline from 2022 Peak: None — new record levels.
Price increase since end-2019: +37.1%
Active inventory since end-2019: -57%
After a less than 1% decline in 2H 2022, Cleveland home prices roared higher in April 2023, setting new records.
DALLAS
April 2023 Index: 286.71 (+0.5% MoM, -2.9% YoY)
Price decline from 2022 Peak: -5.5%
Price increase since end-2019: +47.3%
Active inventory since end-2019: -25%
Dallas home prices peaked in June 2022 and then declined for 8 straight months before increasing in April 2023.
DENVER
April 2023 Index: 308.61 (+0.4% MoM, -4.6% YoY)
Price decline from 2022 Peak: -5.6%
Price increase since end-2019: +36.2%
Active inventory since end-2019: -17%
Denver home prices peaked in May 2022, and then declined for 7 straight months before bottoming in January 2023. We’ve now seen 2 months of MoM increases.
DETROIT
April 2023 Index: 172.11 (+1.0% MoM, +1.1% YoY)
Price decline from 2022 Peak: None — new record levels
Price increase since end-2019: +33.6%
Active inventory since end-2019: -51%
Detroit prices peaked in May 2022 and slowly declined for 8 straight months (total 2% drop) before bottoming in January 2023. Since then, prices have risen dramatically MoM (+1.4% in March, +1.0% in April) to set new highs.
LAS VEGAS
April 2023 Index: 270.20 (+0.1% MoM, -6.7% YoY)
Price decline from 2022 Peak: -8.9%
Price increase since end-2019: +37.5%
Active inventory since end-2019: -12%
One of the hardest-hit cities, Las Vegas home prices peaked in June 2022 and then fell 9% over the next 8 months before seeing their first increase in April 2023.
LOS ANGELES
April 2023 Index: 401.23 (+1.1% MoM, -3.2% YoY)
Price decline from 2022 Peak: -4.2%
Price increase since end-2019: +37.6%
Active inventory since end-2019: -33%
Los Angeles home prices peaked in May 2022 and then dropped 6% over the next 7 months. Prices have risen MoM for the last 3 months, including a chunky +1.1% in April 2023.
MIAMI
April 2023 Index: 403.18 (+0.3% MoM, 5.2% YoY)
Price decline from 2022 Peak: -0.9%
Price increase since end-2019: +62.5%
Active inventory since end-2019: -51%
Miami’s price growth over the last three years has been incredible. The 1% decline since prices peaked in July 2022 is barely noticeable.
MINNEAPOLIS
April 2023 Index: 231.25 (+0.5% MoM, 0.0% YoY)
Price decline from 2022 Peak: -0.6%
Price increase since end-2019: +28.0%
Active inventory since end-2019: -32%
Minneapolis prices peaked in June 2022 and then fell 2% over the next 7 months. Prices bottomed in February 2023, and have improved the last 2 months, nearly erasing the declines from 2H 2023.
NEW YORK CITY
April 2023 Index: 277.03 (+1.3% MoM, +3.0% YoY)
Price decline from 2022 Peak: None — new record levels.
Price increase since end-2019: +36.4%
Active inventory since end-2019: -39%
Given all the media headlines about empty apartments and New Yorkers moving to Florida, you’d expect to see a bigger drop. Instead, NYC’s decline during 2H 2022 was just 2%, and after two months of big increases (+1.2% in March 2023, +1.3% in April 2023), prices are at new highs.
PHOENIX
April 2023 Index: 310.87 (-0.1% MoM, -6.2% YoY)
Price decline from 2022 Peak: -8.5%
Price increase since end-2019: +54.7%
Active inventory since end-2019: -28%
Phoenix stands alone as the only big city that has not seen home prices bottom — though this may change next month. Still, a 8–9% drop is nothing compared to the 55% increase seen since end-2019.
PORTLAND
April 2023 Index: 319.77 (+0.8% MoM, -5.3% YoY)
Price decline from 2022 Peak: -5.5%
Price increase since end-2019: +31.2%
Active inventory since end-2019: -16%
Portland home prices peaked in May 2022 and dropped 8% over the next 8 months. But prices have increased MoM for each of the last three months.
SAN DIEGO
April 2023 Index: 394.34 (+0.9% MoM, -5.8% YoY)
Price decline from 2022 Peak: -6.3%
Price increase since end-2019: +47.3%
Active inventory since end-2019: -51%
San Diego prices peaked in May 2022 and dropped 8% over the next 8 months. But after two months of improvements, those losses are being recovered quickly.
SAN FRANCISCO
April 2023 Index: 339.06 (+1.0% MoM, -11.2% YoY)
Price decline from 2022 Peak: -12.1%
Price increase since end-2019: +25.1%
Active inventory since end-2019: -19%
The poster child for the Pandexodus (workers leaving big cities), San Francisco saw prices drop 13% between May 2022 and February 2023. Since then, prices have rebounded strongly, but SFO still has the lowest % increase over the last 3 years of all the big 20 cities tracked by Case-Shiller.
SEATTLE
April 2023 Index: 350.06 (+0.6% MoM, -12.5% YoY)
Price decline from 2022 Peak: -12.9%
Price increase since end-2019: +34.2%
Active inventory since end-2019: -14%
Another hard-hit west coast city, Seattle saw prices peak in May 2022 and drop 13% over the next 10 months. April 2023 saw the first MoM increase, but Seattle still has the largest peak-current drop of all the big 20 cities tracked by Case-Shiller.
TAMPA
April 2023 Index: 370.32 (+0.4% MoM, 2.4% YoY)
Price decline from 2022 Peak: -2.6%
Price increase since end-2019: +64.2%
Active inventory since end-2019: -37%
Almost identical to Miami, but with a slightly bigger drop in prices during 2H 2022. Still, it’s barely a speed bump, and Tampa has the highest % increaes since end-2019 of all the big 20 cities tracked by Case-Shiller.
WASHINGTON D.C.
April 2023 Index: 302.38 (+0.5% MoM, -0.6% YoY)
Price decline from 2022 Peak: -1.5%
Price increase since end-2019: +27.6%
Active inventory since end-2019: -38%
With a chart that looks like Detroit or Minneapolis, our nation’s capital saw prices peak in May 2022 and drop 3% over the next 8 months. But after 3 months of improvements, D.C. could be settting new highs soon.
Written by Scott Bradley Brixen
A CFA with 20 years of experience in global investment banking and equity research
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