macroblog: Housing In The Midwest: No Boom, All Bust

リンク: macroblog: Housing In The Midwest: No Boom, All Bust.

Last month the good folks who bring you the Case-Shiller Home Price Index unveiled the addition of ten new metropolitan areas to the their existing collection of data on housing prices: Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland (Oregon), Seattle, and Tampa. I've posted a look at the latest C-S details for the now fully electronic version of the Federal Reserve Bank of Cleveland's Economic Trends, and you can find a great interactive map at the website of MacroMarkets LLC (who possess "exclusive license and sublicensing rights to the CSIs for the purposes of developing, structuring and trading financial products.") But here's what I've come to moan about this morning:

   

Midwest_levels

Midwest_growth_rates 

   

Compared to the overall averages -- captured by housing prices in the "composite 10" (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington D.C.) or all 20 metro areas in the C-S "composite 20" index --  the rapid appreciation of 2002-2006 was either less spectacular or simply did not occur in the major Midwest cities.  We were not, however, spared the rapid deceleration of price gains.

You might argue that the Minneapolis area had its boom somewhat ahead of schedule, and that despite slowing the growth rate of prices in and around Chicago are still pretty healthy.  For Detroit and Cleveland, however -- well, there's just no excuse.

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Comments

The difference is leverage. It is usually positive in metropolises but only neutral in smaller cities like Cleveland because mortgage rates are national but growth rates are local.