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

[Terry Lao]

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%

[Jonathan Twombly]

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.