Home prices for Case Shiller 20 city largest metros Mar'18

Home prices for Case Shiller 20 city largest metros Mar'18

Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes

The real estate market for now is on fire. All 20 largest metros had positive gains from Mar'17 to Mar'18. Some cities like Seattle, Las Vegas, and San Francisco had double digit gains, but overall all cities had positive gains. When one says that the real estate market is going to crash, well, at some point but not now, or short term until Dec'18. The key to forecasting a downturn is when you start seeing a few cities start to head south. But for now, none of the below cities are negative.

Okay, let the nah sayers begin.

Terry

MARCH 2018
Metro Monthly change 12-month change
Seattle 2.80% 13.00%
Las Vegas 1.50% 12.40%
San Francisco 2.10% 11.30%
Denver 1.40% 8.60%
Los Angeles 0.90% 8.10%
Detroit 1.10% 7.90%
San Diego 1.00% 7.70%
Tampa 0.60% 7.50%
Phoenix 0.90% 6.80%
Portland 1.00% 6.70%
Atlanta 0.80% 6.20%
Charlotte 1.00% 6.20%
Minneapolis 1.70% 6.10%
Boston 1.20% 5.80%
Dallas 0.70% 5.80%
New York 0.10% 5.20%
Miami 0.70% 5.00%
Cleveland 0.30% 4.60%
Washington 1.10% 3.00%
Chicago 1.10% 2.80%
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Rental Property Investor · Brooklyn, NY · Member since 2014 · 722 posts · 1k+ votes
8y

As you say, the data lags by two months.  New York, it seems, has already gone negative, and it looks like Cleveland will follow.  So, perhaps it's time to start getting concerned.

New York looks like it will start turning down before it ever reaches its previous peak.  There is no magic in the previous peak number, especially when it was a bubble.  Look at Japan.  It's 2018, and property prices are still trading way, way below their 1989 peak, even in Tokyo, which has solid population growth even though the country overall is shrinking.  (Kind of reminds me of Columbus, which is growing even though Ohio has flat or negative growth.)

Interest rates are on the rise, which is going to start showing up in the data very soon. REIT stocks are getting creamed right now because Wall Street believes higher interest rates will take a huge bite out of their profits.

In any event, who wants to invest in a hot market?  How do you make money by buying at or near the top?  You make money by buying when other people are scared to buy, and getting a great price, and then by selling to people who like to buy in hot markets at ridiculous prices.

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  • Flipper/Rehabber · Riverdale, NY · Member since 2017 · 112 posts · 27 votes
    8y

    where did you find this information? I would love to access this for cities i invest in. 

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @April Molina

    You can find case shiller data on below link. However, the negative is that data is 1-2 months behind. Notice that the above data is for Mar'18, and now the May'18 data is about to come out soon. I guess they have to crunch the numbers and that takes time.

    https://us.spindices.com/index-family/real-estate/...

    Zillow has a feature that allows you to search and city and crunch your own data. I'm a numbers persons and this was too much information. I can crunch the numbers for cities that have the best cashflows, but then the appreciation aspect was relatively low. I prefer cities with a million or more population because you need that number for growth. Add good companies and a good economy, and you got the perfect recipe for growth and appreciation.

    https://www.zillow.com/research/data

    Terry

  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    8y

    @Terry Lao great info. Minneapolis sure has been on a run and we've seen great appreciation here.

  • Rental Property Investor · Brooklyn, NY · Member since 2014 · 722 posts · 1k+ votes
    8y

    As you say, the data lags by two months.  New York, it seems, has already gone negative, and it looks like Cleveland will follow.  So, perhaps it's time to start getting concerned.

    New York looks like it will start turning down before it ever reaches its previous peak.  There is no magic in the previous peak number, especially when it was a bubble.  Look at Japan.  It's 2018, and property prices are still trading way, way below their 1989 peak, even in Tokyo, which has solid population growth even though the country overall is shrinking.  (Kind of reminds me of Columbus, which is growing even though Ohio has flat or negative growth.)

    Interest rates are on the rise, which is going to start showing up in the data very soon. REIT stocks are getting creamed right now because Wall Street believes higher interest rates will take a huge bite out of their profits.

    In any event, who wants to invest in a hot market?  How do you make money by buying at or near the top?  You make money by buying when other people are scared to buy, and getting a great price, and then by selling to people who like to buy in hot markets at ridiculous prices.

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Jonathan Twombly

    You are correct as chart above is almost two months behind. I would be concerned if I invested in the bottom five cities, New York, Miami, Cleveland, Washington, and Chicago. Those five cities has the best chance to go negative, but even a few months of negative will put year over year still in the positive. 

    My niche is Las Vegas, and at the very top. I can tell you that the Las Vegas real estate market is red hot. Housing in such a demand as construction of new casinos ($7B), and Raiders $1.9B stadium, will extend growth through 2020. 

    Also, the exodus of people leaving southern california, makes Las Vegas an attractive alternative. Median SFR in OC/LA over $600k. Median SFR in LV, $289k. It is a no brainer.

    Terry

  • Rental Property Investor · Brooklyn, NY · Member since 2014 · 722 posts · 1k+ votes
    8y

    I'd put way more faith in the population flow from Californians seeking relief from the high cost of living than in the stadium.  Stadiums and conference centers often prove to have negative net economic effects - basically government giveaways to private corporations that don't pay for themselves.  Population growth is another story, though.  Still, if California starts to tank and becomes more affordable, what happens to Vegas?

  • Lender · Los Angeles, CA · Member since 2015 · 399 posts · 174 votes
    8y

    I don't pay too much attention to housing statistics but I keep hearing that people are leaving California like crazy.  Which makes me wonder why here in Los Angeles there is an extreme housing shortage, rents are going through the roof, the state recently passed an law making Accessory Dwelling Units easier to build in an effort to mitigate the the housing shortage, property values are at a level at or above the housing bubble peak.  If it's true lots of people are leaving it must mean more people are coming in than leaving.  Oh, and there are more homeless people on the street than ever before, to the point that all 15 districts of Los Angeles have agreed to take their fair share of homeless and house them on public lands.

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Jonathan Twombly

    If California starts to tank, like 2008-2010, then probably everywhere in west will tank, including Las Vegas. For those that already moved to Las Vegas from Southern Calfornia, then they are stuck because their LV home will have gone down also. The ones that will capitalize are the ones with war chest saved and waiting for this opportunity to surface.

    I believe in buy, hold, and sell. I believe that there is room for appreciation to at least Dec'18, then will evaluate. If keep going up, then will hold. If there is kink in armour, then will sell and build war chest. But for now 20 out of 20 cities nationally up and still going up.

    Terry

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Account Closed

    I'm a numbers person by trade, accounting and finance, and will live and die by the numbers. The details in the numbers are saying the prices are being driven by low inventory and good economy. It is not like 2006-2008, where appreciation was driven by easy loans and greed. This time around, it is all supply and demand. 

    The rich are rich and do whatever they want. The middle class are the ones leaving Southern California. The poor are replacing the ones leaving thus putting bigger tax burden on the rich and middle class. Haven't you notice that California is a sanctuary state? The democrats do this for the votes, and no other reason. 

    There will be a tipping point where the rich will start leaving, and when that happens, the house of cards will fall.

    Terry

  • Earth · Member since 2017 · 297 posts · 187 votes
    8y
    From the history (real estate, stock, crypto currency) don’t end bad until it reach the super super crazy stage. We are still far away from the super crazy stage yet. If you look at Las Vegas case shiller data from 1987 to 2018, on average, today Las Vegas house price has less than 3.6% raise each year since 1987. Each year has only 3.52% growth on Las Vegas house price since 1987, include the inflation, today’s Las Vegas house price is not expensive at all.
  • Earth · Member since 2017 · 297 posts · 187 votes
    8y
    If I live in Japan today, if the properties have positive cash flow and the numbers make sense, I will buy Japan properties when others scare today.
  • Earth · Member since 2017 · 297 posts · 187 votes
    8y
    After the crypto currency crash this year and while many people scare of it today, recently I just bought some crypto currency for fun (prepare to lose it all or make very good money in a few years)
  • Earth · Member since 2017 · 297 posts · 187 votes
    8y
    A relation is a set of the pair of coordinates. A relation can be described using a graph from the statistics data. I rely on the statistics data heavily to understand the market trend and make actions.
  • Jason LeePro Member
    Real Estate Agent · New York, NY · Member since 2015 · 401 posts · 235 votes
    8y

    Case-Shiller data is worthless for NYC. Their "New York" data is made up of counties in NY but also NJ, CT, and even PA(!). It also only tracks single family re-sales. No new construction or multi-families. Percent of single family home sales in Manhattan is about 1% of all sales so despite being labelled New York, it doesn't cover Manhattan at all. Manhattan average and median sales prices are actually down in Q1 YOY. Q2 numbers will probably be worse. As others have noted, the data is backward looking and some of these March numbers are for deals that could have very likely been accepted in 2017. If the data is skewed and worthless for NYC, it might be in these other "cities," too. 

    Yours Truly,

    "Nay sayer ;D"

  • Rental Property Investor · Brooklyn, NY · Member since 2014 · 722 posts · 1k+ votes
    8y
    Originally posted by @Jason Lee:

    Case-Shiller data is worthless for NYC. Their "New York" data is made up of counties in NY but also NJ, CT, and even PA(!). It also only tracks single family re-sales. No new construction or multi-families. Percent of single family home sales in Manhattan is about 1% of all sales so despite being labelled New York, it doesn't cover Manhattan at all. Manhattan average and median sales prices are actually down in Q1 YOY. Q2 numbers will probably be worse. As others have noted, the data is backward looking and some of these March numbers are for deals that could have very likely been accepted in 2017. If the data is skewed and worthless for NYC, it might be in these other "cities," too. 

    Yours Truly,

    "Nay sayer ;D"

    Yes! And, prices in New York have not fully recovered to their previous peaks in real terms according to Case Shiller before turning downward, meaning that people who simplistically believe that a market will always return to its previous peak are engaging in wishful thinking.  Sure, the market may return to its previous peak, and they often do in normal cycles, but the last cycle was not normal.  Assuming that the current cycle will exceed the previous peak before turning down is not a safe assumption, especially in markets that lack strong underlying fundamentals. 

  • Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    8y

    The Cali shift partly translates to lower income leaving and higher incomes replacing them. I read somewhere, the majority who leave make sub 50k and the majority of new arrivals make north of 100k. So sort of a state wide gentrification perhaps as total population net gains yoy. 

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Matt R.

    You might be referring to below article.

    http://www.sandiegouniontribune.com/opinion/the-co...

    I lived in California all my life, and all I can say is everything is going downhill. The rich pay over 50% of the taxes in California. The article says more rich (200k), are moving in. Husband and wife making 200k is not really rich for the bay area. Even in southern california, 200k, is still middle class. 

    Here is the X factor, illegal aliens. It is safe to say that they are poor, and get alot of government freebies. This is why the rich pay for over 50% of the state's taxes. California has the largest illegal immigrant population in the united states. If rich are coming in, and poor leaving, and factor in illegals coming in, then you will need way more rich to make up the difference. 

    Also, there are way more poor than rich. 

    Terry

  • Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    8y

    Housing in Vegas is just silly. I bought my house about 18 months ago and I'm thinking of selling just to cash in on the completely unwarranted gains I've made.

    that said, Everyone here thinks the market climb has no end. That alone is enough for me to be scared, when no one is worried, be worried.

  • Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    8y

    @Terry Lao I hear ya. The new illegals don't come here as much anymore, the rents are just too GD high NYC style. They do mostly goto mostly Vegas, Phx and TX now though. 

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Alexander Felice

    Nice hearing from you. Would you say the gains on your Las Vegas SFR is greater or less than your investment property in NC?

    If you cash out, then where will you live? rent? 

    I know your are buy and hold, but i'm buy, hold, and sell. The price point of my sell for 4plexs has been met at 300k. Now, I'm re-evaluating, and everything looks good to at least Dec'18.

    Did you put money on Vegas Golden Knights at 500-1? I rooting for VGK to win, and maybe even join the victory parade down the strip. Not in wildest imagination 5 years ago, that NHL and victory parade in same sentence.

    Terry

  • Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    8y
    Originally posted by @Terry Lao:

    @Alexander Felice

    Nice hearing from you. Would you say the gains on your Las Vegas SFR is greater or less than your investment property in NC?

    If you cash out, then where will you live? rent? 

    I know your are buy and hold, but i'm buy, hold, and sell. The price point of my sell for 4plexs has been met at 300k. Now, I'm re-evaluating, and everything looks good to at least Dec'18.

    Did you put money on Vegas Golden Knights at 500-1? I rooting for VGK to win, and maybe even join the victory parade down the strip. Not in wildest imagination 5 years ago, that NHL and victory parade in same sentence.

    Terry

    My NC market is non-appreciating. That's cash flow only. so it's apples to oranges. I'll make more appreciation on this house, but it's very one-dimensional. My rentals allow for leverage and create freedom that I can't match in Vegas B&H

    I'm not definitely going to cash out, but it's enticing. I bought a house here last year RIGHT before the mania (because I'm smart as ****) for $220K just over a year ago. 2 houses in my neighborhood (exact same floorplan) just sold for $270, if by next summer I see $300K then I may just sell and take my meager earnings. Guaranteed payments is better than speculative payments. I would likely stay here and rent for another ~2 years then move out of market. I'm also entertaining the idea of staying put and just taking out a big HELOC, but my fear of getting stuck in this house and town is significant.....

    I don't gamble at all, and I don't watch sports. Sorry. I will take any excuse I can get to party though ;)

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Alexander Felice

    I agree that LV and NC is different markets, and SFR vs multi's, appreciating vs. cashflows. But the bottom line is profit/money.

    When I analyzed Las Vegas, SFR vs multi's, I preferred cashflow, thus went with multi's. I probably netted about 35k in cashflow over 2-3 years. The surprise factor was that appreciation was even better, about 250k. So I understand the apples to oranges, but when you convert the apples and oranges to green.......... it is rather obvious and significant.

    Terry

  • Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    8y
    Originally posted by @Terry Lao:

    @Alexander Felice

    I agree that LV and NC is different markets, and SFR vs multi's, appreciating vs. cashflows. But the bottom line is profit/money.

    When I analyzed Las Vegas, SFR vs multi's, I preferred cashflow, thus went with multi's. I probably netted about 35k in cashflow over 2-3 years. The surprise factor was that appreciation was even better, about 250k. So I understand the apples to oranges, but when you convert the apples and oranges to green.......... it is rather obvious and significant.

    Terry

    for sure, if I had bought earlier my mindset would be different. I didn't buy late, but not really early enough either. Also, my SFR won't cash flow like your MF will, so keeping it will be for personal use BEST CASE. Making it even more appealing to sell and take guaranteed returns rather than hold on to it because my exit strategy options are dreary.

  • Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    8y

    Great thread and discussion!  I still think diversification in markets is key.  Coupled with cash flow, investors should be protected as national corrections do not tend to occur.  However, with the virtual repeal of Dodd-Frank, I may be wrong...

  • Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    8y

    @Alexander Felice

    SFR, especially if it is your primary residence are difficult decisions, and thus what I call emotional decisions. Add that if your job is in Las Vegas, which it is, then you are basically stuck. My LV investments have no emotional attachment, thus can let go at anytime.

    You might want to think about your earlier post...........by next summer I see 300k then I may sell.

    I have a feeling it will reach 300k sooner than next summer.

    Here's my forecast for median SFR.

    Terry

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