We’re starting to see stories about home prices falling in Toronto and Sydney.
Home prices aren't falling in the United States (yet) but let's see if home prices are starting to slow down anywhere. To do that we'll look at how much home prices have increased in the last 12 months compared to the previous 12 months using the Case-Shiller Home Price Index which covers 20 U.S. cities. They just released data through May 2018.
It turns out that in two cities, home prices were accelerating fast, and in another two, home prices were decelerating fast.
Top Accelerating Cities
Las Vegas home prices have gone nuts the last 12 months. Home values appreciated 12.6% over the last 12 months but "only" 6.9% over the previous 12 months.
San Francisco has seen the largest home price gains in the U.S. since the Great Recession and is appreciating ridiculously fast again at 10.9% over the last 12 months.
Bottom Decelerating Cities
These two cities are still appreciating fast, just not as fast as they were the previous 12 months.
Portland was the second hottest market in the country from May 2016 to May 2017 but it's come back down to earth with appreciation of 5.9% over the last 12 months. Of course, in normal times 5.9% appreciation would be considered great, but this year it's below average.
Dallas was the third hottest market from May 2016 to May 2017 but it's decelerating after a multi-year run of strong home price increases. Texas didn't have much of a real estate boom or bust like the three cities above. Perhaps Dallas is just catching its breath like San Francisco did a year or two ago.
Seattle. Wow.
You can see from the table above that Seattle was the hottest real estate market in the United States the last 12 months (up 13.6%) and also the previous 12 months (up 13.3%). But seriously, that's kind of scary.
U.S.
Nationally, Case-Shiller estimated that home prices increased 6.4% over the last 12 months. That's very high and the rate of appreciation is accelerating because U.S. home prices had increased 5.7% the previous 12 months.
Although home prices in Toronto, Vancouver, Sydney and Melbourne have lost all upward momentum and have started to fall, we haven't seen anything like that in the United States so far.
