Minneapolis Is Still Number One

Case-Shiller offers many real estate indexes but I like this comparison of these six cities in particular.

CaseSchillerHomePriceIndex

First of all the inflation adjustment removes the fears of hyper-price increases as it shows home prices lower than those in the bubble peak of 2007. But then look at the older mega cities: New York, Chicago and Washington DC. Their prices are meagerly increasing, which tells a story of influx or population and matching out-flux.

Dallas and Los Angeles’ prices continue to climb upward, indicating continued strong demand, at least on the surface.  Texas is known for few zoning restrictions indicating an ease for the market to respond to demand for more units.  California is known for heavy handed control of growth through regulation and zoning, so perhaps price increases here are driven by lack of new units.

And then Minneapolis is somewhere in between, living up to Garrison Keillor’s claim that Minnesotans are always just a bit better than average.  Note however that the Minneapolis line has the most distinctive scalloped shape, and that the dip always occurs in January and February.  When temperatures hold in the negative twenty range for weeks at a time the buying process is all but drawn up to a halt.

Follow the cities from north to south and you can pretty well line up weather forecasts to the quieting of the dips and peaks in the price gyrations along each line. But in the category of most distinctive line movement, Minneapolis is still number one!

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