You’d think housing prices are rising everywhere in America, the way the current boom is discussed. And that’s nearly true, for lots of reasons: the low interest rates on mortgages; the bidding up of asset prices at a time of loose money; the desire for bigger and more distanced properties in the pandemic, and the swallowing up of thousands of tract homes by investment outfits looking to rent them.
But even with those influences, not everywhere is rising by double-digit percentages annually. People can only live—or own—in so many places at once. And so it is that in a good 10 metropolitan areas, according to realty data site CoreLogic, you’ve barely seen any price appreciation in the five years to June 2021. So, nearly no gain for existing homeowners, and no frightening increases for affordability migrants.
Keep in mind that even in the years just before Covid, real estate was hot. That includes major cities such as New York, which then softened as virus-conscious residents departed for greener pastures. Thus a five-year period captures both mini-cycles. Where were buyers not looking, pre- and post-lockdown?
For one thing, in the oil-and-gas belts. Fossil fuel prices were weak for most of those five years. So, no surprise that Louisiana and Oklahoma locales (in Census terms, metropolitan statistical areas) have lagged, with Houma-Thibodaux showing a cumulative price rise of only 9%. (No MSA had a decline, and for the overall U.S. the increase was 42%.)
If you had to pick a state of general torpor, however, that state would be Illinois. It occupies four of the 10 spots, and was one of only three states to show a 10-year population decline in the 2020 Census.
And let’s give special notice to Peoria, IL. Turns out that Peoria figured in a 2014 Kiplinger’s list of 10 markets where housing had fallen the most since its 2006 peak—about 10%. That means at least a 15-year spell for homes there with a flat net.
That’s either good or bad news, depending on whether you’re a seller or buyer. Will the news be changing? Illinois has a particular problem with public-pension indebtedness, and taxes have been trending up. Maybe the economy will rally regardless. But it’s safe to say that, for now, the idea of a universal residential rush will not play in Peoria.
CUMULATIVE CHANGE IN HOUSING PRICES, June 2016-June 2021 (Source: CoreLogic*)
|Shreveport-Bossier City LA||10%|
*These rates are calculated using a CoreLogic Case-Shiller Index. In some small metro areas, differences in modeling techniques can make results volatile. The Case-Shiller model smooths the index to deal with this volatility.