Home Prices in 20 Major Cities: You're OK If...

The average experience in the 20 largest metropolitan areas is that July 2004 marks the dividing line between profit and loss.

If you bought a home in the following metropolitan areas, do you have a profit or a loss? 

Phoenix: If you bought before January 2005 then you probably have a profit.  

Los Angeles: If you bought before April 2004 then you probably have a profit. 

San Diego: If you bought before September 2003 then you probably have a profit.

San Francisco: If you bought before March 2004 then you probably have a profit.

Denver: If you bought before May 2004 then you probably have a profit.

Washington D.C.: If you bought before September 2004 then you probably have a profit.

Miami: If you bought before September 2004 then you probably have a profit.

Tampa: If you bought before January 2005 then you probably have a profit.

Atlanta: If you bought before February 2005 then you probably have a profit.

Chicago: If you bought before January 2005 then you probably have a profit.

Boston: If you bought before February 2004 then you probably have a profit.

Detroit: If you bought before January 1999 then you probably have a profit.

Minneapolis: If you bought before April 2003 then you probably have a profit.

Charlotte: If you bought before April 2007 then you probably have a profit.

Las Vegas: If you bought before March 2004 then you probably have a profit.

New York: If you bought before March 2005 then you probably have a profit.

Cleveland: If you bought before May 2002 then you probably have a profit.

Portland: If you bought before May 2006 then you probably have a profit.

Dallas: If you bought before March 2006 then you probably have a profit.

Seattle: If you bought before June 2006 then you probably have a profit.

The average buyer who purchased a house after the months noted above has a loss.

These conclusions are based on inspection of the S&P/Case Shiller Home Price Indices released on July 29, 2008, reflecting data through May. These conclusions reflect the average home, and there’s substantial variation around the mean.

Comments

[deaverb:]

An interesting perspective. Especially as you look at markets other than your own. Pee Dee's comments are true if you look at this as a "whole" presentation of the facts. But the author is not purporting to do that. Just presenting an interesting look at things, make of it what we will as a reader. Nice work on that basis.

2008 Jul 30 08:22 AM

[erniem:]

I bought in 1988, did I do the right thing? My house has lost a lot of value, it is only worth four times what I paid for it, not five.

2008 Jul 30 09:30 AM

[BrunoT:]

Go have a smoke, Pee Dee. There's merit to the analysis. My own analysis of my market is nearly the same conclusion. I bought (signed the contract) in Winter '05 and had gathered comps on sales and concluded my home is still worth a little more than I paid for it. This study says "before Feb '05" which is the same date.

If you stupidly bought a bunch of investment homes near the peak of the market, that is not the same thing as this guy pointing out that your home is currently worth more than you paid for it, which is likely what he means, rather than "profit". If you bought a home in an environment where rents were far lower than carry costs that's not his fault. Only morons bought in that environment.

I rented a beach view townhome, just accross a minor road from the beach, as a 2nd home, in a small beach community worth $550K for $1250/mo in fall 2005. That guy certainly wasn't making a profit! But his townhome sold for about that much recently. It's home prices the column's about, not profits from investors who were not investors but really speculators hoping for a bigger fool to buy their property later.

In my home's community, my home would rent for nearly the carry costs (assuming 20% down), which is a good sign that home prices won't fall much if any from this point. But they never did change much, this is a stable market. It's the clowns who bought homes to flip in bubble markets taking the bath.

2008 Jul 30 09:39 AM

[notsosmart:]

just because a person writes an article on this or other sites does not make them an expert.there are no experts.opinions based on a lot or little info,it makes no difference. almost all have an agenda.believe nothing & nobody.think for yourself.anything free in this country is worth what it costs(including this) lol.

2008 Jul 30 10:05 AM

[Joseph Wagda:]

The reader also must keep in mind that in order to realize a profit, the homeowner has to sell. In doing so, the homeowner must pay real estate commissions, engage counsel (in some states like New York), fees, and applicable taxes, and make repairs needed to pass inspection. These costs can add up to 7% of the transaction price or more.

2008 Jul 30 10:33 AM

[rm:]

[Detroit: If you bought before January 1999 then you probably have a profit. ]

I work with a lot of MI folks- not so much in Detroit, and I had recently noticed that a lot of this year's sales are +/-2002 levels.

So I appreciate your take in this article.

Of course, these are gross figures... when you factor in costs of sale, etc. your net comes in well below these levels.

Not sure what PDiddy's problem is... only a fool would stop his due diligence there.

It's helpful to have "rule of thumb" measures like this.

So, I'm going to give this article a "thumbs up."

2008 Jul 30 10:40 AM

[Emerald:]

If you bought your house as an "investment", you will react one way to the data. If you bought it to live in and hope the price would keep up with inflation, this would be more realistic. If you bought near the peak in nay market, ypou will lose if you need to sell. I have made money on primary residences and lost as well because I moved for a job. If you don't have to move, enjoy the cut in property taxes that's coming. If you have an adjustable mortgage, you took too much risk.

2008 Jul 30 11:11 AM

[Tom Lindmark:]

This article is on a par with the 5 ways to come your hair nonsense you get on Yahoo.

If you bought in certain zip codes in any one of the cities listed you may have made money no matter when the date of your purchase. You may also have lost money no matter when you bought depending upon where you bought.

A complete waste of time and I should be ashamed of myself for wasting more typing this comment.

2008 Jul 30 11:48 AM

[User 232332:]

Why would you not include stats for the 4th largest city in the U.S., Houston?

2008 Jul 30 11:54 AM

[Ralph S Eps...:]

Do you have any idea what geographical area is included in "San Francisco" or any other metro region, for that matter, that you have opined on?

Do your home work and you will find home prices are either reasonably stable or slightly up, even now, in the City of San Fancisco and close in counties (Marin, San Mateo etc).

It is this kind of irresponsible reporting that continues to mislead consumers about the true condition of the market.

2008 Jul 30 12:33 PM

[Zomack:]

Apparently, some aren't happy unless even a single blog post(not an article, not a book, not a week-long symposium) provides an exhaustive analysis of every nuance on the topic -- every angle, every perspective, every market, every scenario, etc.

It is what it is...and it's free. Add it to the gobs of other pertinent data that's available and draw your own conclusions(instead of expecting somebody else to tie it all together all the time for you).

Having said that, I do appreciate comments offering insight into how one might interpret data and, as someone said above, many times the comments associated with a blog post end up being more informative than the post itself. Sometimes.

2008 Jul 30 12:33 PM

[Caltorguy:]

Things have slowed down in Toronto too - houses (in good downtown neighbourhoods) only go for $50K over asking instead of $100K and it now takes 2 weeks instead of one to sell a place. An unrenovated 1920s semi in a crappy former bluecollar neighbourhood will still run you about $500K and this is good value (one is told). But then again there were never any sub-prime or interest only mortgages up here and so there are (effectively) no defaults. Banks actually made sure people could afford what they bought - although that is getting to be a pretty small group. I must say though that US real estate is looking temptingly affordable compared to here!

2008 Jul 30 01:03 PM

[adan:]

nice article; very interesting layout of general values for different cities - thanks!

2008 Jul 30 01:24 PM

[ATHELSTAN:]

Amazing how supposedly sophisticated investors and observers of the market and economy are so easily impressed with analyses like this. The entire financial services profession has deteriorated into a monument to deceit, plays to the gullibility of its followers, feeds naivete, and conducts fraud on a scale one might find in the side-show entertainments of a small 19th century traveling circus. Only fifty cents to see the Egress!!!

Wall Street also proves time and time again there truly is one born every minute.

2008 Jul 30 03:05 PM

[Illusion:]

What about accounting for Home equity withdrawals to finance the Escalades and trips to Vegas?
I see many people who have good credit who used the home ATM to spend and are now underwater. They have the income but no/negative equity left and therefore no incentive to stay on in their homes.

2008 Jul 30 03:22 PM

[mallarde:]

Now when are people going to start saying that there is no "Housing Crisis"? There is only a bunch of cry-baby speculators that might have to sell for a loss.

Oh, I am having trouble making the payments on that Ferrari in my garage. What is more American than having your own set of wheels? When will the U.S. government help me???

2008 Jul 30 08:25 PM

[globalHOBBIT:]

"Print media may not have a bright financial future but darn it there has to be a better way than this and Clowns N Buffoons Channel (CNBC) ."

It's nice to see that there are others out there that believe that CNBC is a joke. With few exceptions like Art Cashin, who's really just a daily contributor most are typical like Erin Burnett who acts like a 10 year old school girl. Her Laurel & Hardy routine every morning with Mark Haynes is pathetic at best. The truth was most clearly stated by Dennis Neale who was overheard saying to Larry Kudlow 'I don't know a damn thing on this topic so why do you have me on as a guest?" My thoughts too Dennis....... my thoughts too!

2008 Jul 31 07:25 AM

[peterthepai...:]

goin down brother! goin down!

2008 Jul 31 08:20 AM

[Chris Lau:]

+1 Helpful.
You know what would be helpful would be to determine the % who bought before those dates, and to compare it to those who bought after that date. It the ones who hold mortgages for properties bought at the peak who will be likely to default.

2008 Jul 31 10:14 AM

[ridge runner:]

A good post, with due appreciation of the in-metro-area volatility of home prices. For those who want more precise readings on their neighborhood, the Zillow website is an illuminating source of such information. Those who complain about the limited information in this post should get a clue: all of our measures of home prices have limited resolving power. Get used to it.

2008 Aug 01 01:04 PM