This Housing Market Is Falling Apart

By Douglas A. McIntyre Published Feb 28, 12:25PM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

This Housing Market Is Falling Apart — © bluejayphoto / iStock via Getty Images

The S&P CoreLogic Case Shiller home prices index is America’s most widely regarded study of home valuations. Its latest edition, which is for December, showed that the increase in housing markets continues to slow. It also showed that one market is falling faster than all others year over year. The market is San Francisco, one of the most expensive housing markets in the country. (Click here to see where young people what to relocate to the most.)

Nationally, home prices rose 5.8%. That is down from nearly 20% early last year. It was also down from 7.6% in November. Craig J. Lazzara, managing director at S&P DJI, commented, “The cooling in home prices that began in June 2022 continued through year end, as December marked the sixth consecutive month of declines for our National Composite Index.”

Home prices in San Francisco dropped 4.2% year over year in December. The only other city among the top 20 metros in the United States that had a drop was Seattle at 1.8%. Prices in several cities continued to surge. Tampa’s rose 13.9% between the two periods, and Miami’s rose 15.9%.

While 4.2% does not seem large, home prices in San Francisco surged for a decade before the pandemic.
[nativounit]
San Francisco is the second most expensive city in the United States after neighbor San Jose. The median home price in the city is about $1 million.
[wallst_email_signup]
Home prices in San Francisco have dropped for at least two reasons. The first is that 6% mortgage rates have put the prices of homes in the city well out of reach of most buyers. The second is worker mobility.
[recirclink id=1206702]
The COVID-19 pandemic work-from-home opportunity led tens of thousands of people to leave expensive homes on the coast to move to inland cities or metros in the south. Many of these had a perceived better quality of life and a lower cost of living. San Francisco has suffered simply because it is so expensive.

San Francisco remains unusually expensive, even if home prices have started to slip. If mortgage rates stay higher, the drop is not over.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.