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June 3, 2011

Metropolitan Housing Markets Aren't Recovering

June 3, 2011

Earlier this week, we got the bad news that house prices are still falling. The Case-Schiller index shows prices down to their lowest levels since the start of the recession. Often, national stories like this mask big differences between metro areas.

That’s why MetroTrends gives you newly released values (and charts) for the Federal Housing Finance Agency’s quarterly House Price Index in each of the 100 biggest metro areas. In every one of these metros, prices were lower in the first quarter of this year than they were a year earlier. But some metros are on a much steeper slide than others.

Metros With Biggest and Smallest Drops in House Prices Since First Quarter of 2010

HPI-highlow-metros

The five metros suffering the biggest declines over the last year were all hit hard by the Great Recession and clearly aren’t recovering yet. Take Tampa. Between 2000 and 2006, house prices there almost doubled. Then, from a peak in the fourth quarter of 2006, they fell steadily through the first quarter of this year—down 45 percent. Prices in the Tampa region today are only 8 percent higher than they were at the start of 2000.

Of the five metros with the smallest declines, all but Honolulu weathered the crash relatively well by national standards. But even in these metros, housing markets aren’t on the upswing. El Paso is a good case in point. Compared to Tampa, the El Paso market saw only modest appreciation between 2000 and 2006 (prices up 34 percent) and then held steady through early 2008 before prices began sliding downward. Today, home prices in El Paso are 10 percent below their peak. But they’re still falling—down almost 2 percent just since the last quarter of 2010.

What does the picture look like in your metro area?

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Comments

It would be interesting to look more closely at the DC area, the only place that continues to do well, according to Case-Schiller. What's driving it?

That is very bad news indeed. I was wondering if you had this data available for all metros?

While I know that the data is at the Metro level and not the state level, it would be interesting to see how these areas compare to where the excess housing units are that the blog calculated risk recently posted. (http://www.calculatedriskblog.com/2011/05/excess-vacant-housing-supply.html).

Having recently moved from the Detroit Metro area to the DC Metro area - from the state with the most excess in housing units to the least - it seems pretty clear that this difference is refelected in both housing prices and rents. Of course there are other factors like the prevalence of jobs that would account for the difference, but I wonder if there are any areas that have both a high level of excess housing units that haven't experienced a price drop or vice versa.

Interesting article!

@Eric S:

Email me at zmcdade@urban.org and I'll be happy to prepare and send you the HPI data for all 363 metros.

Interesting blog you pointed us to. Thanks!