Las Vegas Knocks Seattle from Top Spot in Home Price Growth
After an eye-popping 21 consecutive months atop the S&P CoreLogic Case Shiller Index, Seattle was dethroned by Las Vegas, which reported 13% year-over-year home price growth in June of 2018 versus the 12.81% seen in Seattle. As has been the case in recent months, other Pacific Coast Gateway cities reported lesser appreciation, with Los Angeles and San Francisco increasing by 7.42 percent and 10.66 percent, respectively. On a monthly basis, Seattle’s homes increased by 0.73 percent, a decline compared to the May 2018 report but still ahead of San Francisco (0.47 percent), Los Angeles (0.53 percent) and San Diego (0.6 percent).
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices said in a statement that “even as home prices keep climbing, we are seeing signs that growth is easing in the housing market. sales of both new and existing homes are roughly flat over the last six months amidst news stories of an increase in the number of homes for sale in some markets. Rising mortgage rates—30-year fixed rate mortgages rose from 4 percent to 4.5 percent since January—and the rise in home prices are affecting housing affordability.”
Though Sin City overtook Seattle on the index, it’s difficult to determine to what extent home values there are connected to economic fundamentals. Does Las Vegas, for example, compete with Seattle when it comes to employment and quality of life? No doubt some buyers will say yes, but the more critical backstory here is just how far Las Vegas fell during the financial crisis.
According to a 2010 report released by the Financial Crisis Inquiry Commission in Las Vegas, “Nevada home prices [fell] faster and further than in any other state”—i.e. according to Case Shiller, “[falling] 56.5 percent from the peak reached in August 2006,” reducing the June 2010 home price index to its “lowest in a decade. This put two out of three Nevada homes underwater on their mortgages, and elevated the number of Nevada home foreclosures” to “highest in the nation … nearly four times the national average.”
So, while all cities around the nation saw home prices plummet, nowhere else was hit as hard as Vegas.
Looking at Seattle statistics from the past few months, Seattle’s annual home price growth remains steady, hovering at around 13 percent over the past three months.
For Seattle’s comparative performance on the Case-Shiller Index, see the chart of the Index trends below; and for more details, download the S&P Dow Jones Case-Shiller summary report.