The new Case-Shiller Index is out and the results are not pretty (h/t: Allison Kemper). Overall, the index is down 16 percent over the past year and more than 20 percent since its peak in 2006. The biggest declines – on the order of a third – are in Phoenix, Las Vegas, and Miami. Little surprise there. But San Diego, Los Angeles, and even San Francisco appear to be hard hit. Washington, D.C. has also registered a significant decline – so much for those who thought its housing sector is insulated by federal spending.
I read this graphic in light of two related issues. First, there remains great intra-metropolitan variation in housing prices and housing price trends. Ex-urban Virginia has been hit much harder than Northwest Washington, D.C. or Bethesda, Maryland, though both of those have also weakened off their peaks. Second, the high-end neighborhoods which had appeared so resilient are now beginning to show weakness and decline. This is particularly true of super-resort locations, for example, high-end waterfront locations in Miami Beach or San Diego – a good friend tells me a record number of properties have recently come for sale on Nantucket. But this trend is now also affecting the highest end super-star locations like Manhattan and Greenwich, CT, as the financial class has gotten clobbered.
And for our Canadian readers, here’s what Shiller has to say on Canada’s real estate market in the Financial Post: (McClean’s ponders “Canada’s Looming Real Estate Crisis.”):
Asked whether that meant Canada could face a similar bust Mr. Shiller said: “Yes, especially in places that went up a lot like Vancouver and Calgary. I don’t think Toronto has been quite as extreme.”
Shiller’s track record is beyond prescient: I sure hope he’s right about my new hometown.