The Most Splendid Housing Bubbles in America | Paper Source Online

Originally published by Wolf Street | November 24, 2020

A pandemic of house price inflation.

House prices jumped 7.0% across the U.S., according to the Case-Shiller Home Price Index released in later November. Other indices have indicated similar price surges. House prices are going nuts despite a terrible economy. They’re being fired up by low interest rates, $3 trillion in liquidity that the Fed threw at the markets, fear of inflation that drives people into hard assets, work-from-home that causes people to look for a larger place, the urge to-buy-now before putting the current home on the market, and a shift from rental apartments and condos in high-rise buildings to single-family houses. And condos, as we’ll see in a moment, are not universally hot.

Los Angeles House Prices

House prices in the Los Angeles metro in September jumped by 1.3% from August and by 7.7% from September last year. They’re now 12.9% above the peak of the totally crazy Housing Bubble 1, have nearly doubled (+93%) since early 2012, and having more than tripled since January 2000 (+209%)

The Case-Shiller index was set at 100 for January 2000 across all 20 cities it covers. Today’s index value for Los Angeles of 309 means that house prices have surged 209% since January 2000. This makes Los Angeles the most splendid housing bubble on this list.

Dallas House Prices

The Case-Shiller Index for the Dallas metro – the counties of Collin, Dallas, Delta, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Rockwall, Tarrant, and Wise – rose 0.9% in September from August, and 2.6% year-over-year, the coolest house price inflation on this list of the most Splendid Housing Bubbles.

Dallas is also the last entry on this list, with house prices having “only” doubled since 2000 – meaning house price inflation of 100% in 20 years. The remaining cities in the 20-City Case-Shiller index have experienced house price inflation of less than 100% over the past 20 years and didn’t make the cut.

We shared with you which city came in first and which came in last on the Case-Shiller Home Price Index. To see the other cities in between, continue reading.