Prices are falling by double digits in the Bay Area and rising by double digits in South Florida–a gap that’s near a 30-year high. The wild pandemic-era housing market made price growth trends more local than they had been since 2009.
Real estate trends have been more local in the last year than they have been since 2009.
Metro-to-metro variations in home-price growth reached a 13-year high in spring 2022, at the tail end of the pandemic homebuying boom. Though variation has come down since then, price growth still fluctuates much more than before the pandemic as the housing market cools quickly from the homebuying boom in some parts of the country but holds steady in others.
The historic price-growth gap between San Francisco and Miami illustrates just how local the housing market remains, with the Bay Area losing homebuyers and South Florida attracting them. San Francisco home prices are down 10.1% year over year, while Miami prices are up 10.9% to a near-record high. That 21-percentage-point difference is near the biggest in over three decades (it hit a peak of 23 points in August 2022), and it’s the largest gap among the major U.S. metros Redfin analyzed.
This is according to a Redfin analysis of Case-Shiller Home Price Index data from January 1988 through February 2023, the most recent month for which data is available. When we say “home price” in this report, we’re referring to the Case-Shiller Home Price Index, which tracks home values each month by comparing repeat home sales of single-family home sales over time. When we refer to “national average” price changes, we’re referring to a composite of the 20 major metro areas the index covers. Scroll down for more on methodology.
The wide gap in price growth between San Francisco and Miami reflects the starkly different homebuying experience in those two parts of the country. Some Bay Area house hunters who have been priced out for the last few years may finally be able to break into the market–if they can afford today’s elevated mortgage rates and still-high prices and find a home for sale amid the supply shortage. Meanwhile, many South Florida locals are finding it harder than ever to afford a home.
San Francisco home prices are dropping largely because remote work has untethered many tech employees from the Bay Area, with domestic migration away from that part of the country more than doubling between 2020 and 2022. Additionally, layoffs in the technology industry and declining tech stocks–combined with high mortgage rates and home prices that are still the most expensive in the country–have diminished the Bay Area’s pool of buyers. But Miami prices are still rising as the Sunshine State continues to attract remote workers fleeing more expensive parts of the country.
“The stark difference in home-price dynamics between the Bay Area and Miami may be a reflection of a long-term, pandemic-fueled shift in where people choose to live,” said Redfin Deputy Chief Economist Taylor Marr. “The fact that Miami prices are holding up well despite the national pullback in homebuying suggests the relative popularity of Florida is here to stay. Even though some employees are returning to offices at least a few days a week, the pandemic has given many Americans much more freedom on where they choose to live–and a lot of them are choosing places where shelling out $1.5 million for a run-of-the-mill home isn’t the norm.”
The Bay Area is still much more expensive than South Florida, but as San Francisco’s home prices fall and Miami’s rise, the amount of money a homebuyer saves by moving across the country has diminished. San Francisco’s median home-sale price was still 2.9 times higher than Miami’s in February (roughly $1.42 million versus $483,000), but that’s down from 4.4 times higher in February 2020.
After San Francisco and Miami, the metros with the next-biggest gaps are also expensive West Coast tech hubs paired with relatively affordable Sun Belt locales.
For homebuyers and sellers, the fact that prices are varying widely from metro to metro means it’s more important than ever to focus on local trends.
“If you’re buying a home here in the D.C. area, don’t rely on real estate advice from your friend in the Midwest or your cousin in California,” said Washington, D.C. Redfin Premier agent Steve Centrella. “Insights from other parts of the country can create confusion because they don’t necessarily reflect what’s happening on the ground in your neighborhood. For instance, demand for downtown condos is returning here as government employees return to the office, so buyers may encounter competition for desirable units. That may not be the case in other parts of the country.”
Most metro areas saw their median home prices change within 10.6 percentage points of the national average (+0.4% YoY) in February. That means price declines or increases were in the following range: -4.9% to +5.7% (San Francisco and Miami fall outside that range because they had the biggest decline and increase).
Price growth fluctuated even more from March through May 2022, when variation hit a 13-year high. Home prices were rising everywhere during those months, but how much they were rising depended heavily on where you lived. They were increasing within 15.2 percentage points of the national average (+21.2% YoY in April 2022) in most metros, anywhere from +13.6% year over year to +28.8%. At that time, scores of homebuyers were relocating to popular Sun Belt destinations like Phoenix and parts of Florida, driven by low mortgage rates and remote work. High demand was pushing prices in those places way up, while prices were rising more modestly in other parts of the country like the Midwest and the Northeast.
The growth in home prices across metros has converged somewhat over the last year as mortgage rates have increased and the overall housing market has slowed. The gap remains bigger than it was before the pandemic because now home prices are falling in many metro areas but still increasing in others (San Francisco versus Miami, for example). Varying levels of inventory and homebuying demand also impact prices differently in different areas.
Take February 2020 as a pre-pandemic comparison. At that time, most metros experienced price growth within just three points of the national average (+3.5% YoY), putting them in the range of +2% to +5%.
The last time price growth varied as much as it did during the pandemic was in 2009. That’s when home prices were plummeting in certain areas due to the subprime mortgage crisis. In February 2009, national home prices declined by a near-record 18.4%, but the decline was much bigger in some places and much smaller in others. Most metros saw their median home prices change within 18.4 points of the national average, creating a wide range. One example of that wide range: Home prices fell 35.2% year over year in Phoenix, but just 4.6% in Dallas.
The price-growth gap was even wider during the early-2000s housing bubble, which led to the mortgage crisis. At that time, home prices in different metro areas diverged because the housing bubble hit certain markets hard, while it hardly impacted others. In February 2005, home prices grew within a whopping 20.8-point range in most metros.
“Extreme moments in history lead to extreme swings in home prices,” said Redfin Deputy Chief Economist Taylor Marr. “During economic boom times, when many Americans are flush with cash, homebuying demand soars because many people have the means to buy both primary and vacation homes and perhaps move from one part of the country to another. That pushes prices up in certain places and grabs the attention of home flippers, who jump into the ring and push prices up even further. When there’s a recession like there was in 2009, or economic uncertainty and fears of a recession like in 2023, homebuyers quickly pull back and prices swing down in some areas.”
This report is based on a Redfin analysis of metro-level Case-Shiller Home Price Index data from January 1988 through February 2023, the most recent month for which data is available. When we say “home price” in this report, we’re referring to the Case-Shiller Home Price Index, which tracks home values each month by comparing repeat home sales of single-family home sales over time. When we refer to “national” price changes, we’re referring to the 20 major metro areas the index covers.
The index, which is seasonally adjusted, measures the average change in the total value of all existing single-family home prices. It includes the 20 most populous U.S. metros.
The section about the locality of the housing market is based on the standard deviation of metro-level annual home price growth for each month across the 20 metro areas analyzed. For instance, when we say “most metro areas saw their median home prices change within 10.6 percentage points of the national average in February,” that means roughly two-thirds of the metros included in this analysis had home-price changes within 10.6 percentage points of the national average, and the standard deviation of price growth was 5.3%.
Variation among local real estate markets also includes other metrics such as inventory and days on market, which are not included in this analysis.
