Here is a chart from Residential Club showing home price changes in America's 50 largest metro areas.
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Here is a chart from Residential Club showing home price changes in America's 50 largest metro areas.
Here is a chart from Residential Club showing home price changes in America's 50 largest metro areas.
The month-over-month figure is between August and September 2025. The year-over-year figure is between September 2024 and September 2025. And the "shift since 2022 peak" is the change in home prices since each market's respective 2022 peak (not always the same date apparently).
A number of things stand out.
The month-over-month figures do not look encouraging. The vast majority of markets have gone negative. Of course, one month does not make a trend. The year-over-year column (which is how this table is sorted) looks more balanced, but the national average is still at 0%.
The most prominent outliers in the negative direction are New Orleans (which has been uniquely flat since the start of the pandemic in March 2020), San Francisco and Phoenix (which have both seen a double digit percentage drop since the peak), and Austin (which is down over 25% since the peak).
Austin is a prime example of what happens when you bring a lot of new housing supply to a market — prices come down. Earlier this year we spoke about apartment rents being down 22% from their August 2023 peak. These effects are also being heightened by increased outmigration from the city (previously the fastest growing US metro area).
Back to the office, I guess.
Even with the declines since 2022, most markets remain up significantly, with many smaller markets like Buffalo and Hartford continuing to show strong year-over-year gains. It is interesting to me that over 5 years later, we are still working through the market distortions brought about by the pandemic. The market is searching for a new equilibrium.
Generally speaking, new homes tend to be priced higher than existing homes. This is, again generally, true because new homes are expensive to build, they're new and shiny, and because oftentimes they're pre-sold, meaning the purchase price reflects some future value.
But interestingly enough, this relationship has just flipped in the US, for the first time in at least 25 years. Here's the chart via Charlie Bilello:
This is, of course, a national average, and every submarket and product type is naturally going to have its nuances. Still, this inversion is noteworthy for a handful of possible reasons.
One, it points to softness in the new-home market. And indeed, homebuilder sentiment is down right now.
Two, it may suggest that homebuilders are building smaller, more affordable homes, which would bring down the median price.
And three, it's an indication of the "lock-in effect" that is prevalent in the US (but that is far less of a factor in Canada, where mortgages typically renew every few years).
For homeowners who are locked in at generationally low mortgage rates, there is a huge disincentive to sell. It would mean losing buying power. So why bother, unless you really have to?
This reduces the supply of existing homes on the market.
According to the Financial Times, Cape Town's population (metropolitan area) grew by 27.6% from 2011 to 2022, landing at approximately 4.77 million. Last year it was estimated at 4.97 million. At the same time, residential property prices increased by about 160% during the period from 2010 to 2024, outpacing all other cities in South Africa. Last year the average price of a home increased by 8.5% in Cape Town versus the national average of 4.5%. And as is the case in most desirable cities around the world, this has some people worried.
The month-over-month figure is between August and September 2025. The year-over-year figure is between September 2024 and September 2025. And the "shift since 2022 peak" is the change in home prices since each market's respective 2022 peak (not always the same date apparently).
A number of things stand out.
The month-over-month figures do not look encouraging. The vast majority of markets have gone negative. Of course, one month does not make a trend. The year-over-year column (which is how this table is sorted) looks more balanced, but the national average is still at 0%.
The most prominent outliers in the negative direction are New Orleans (which has been uniquely flat since the start of the pandemic in March 2020), San Francisco and Phoenix (which have both seen a double digit percentage drop since the peak), and Austin (which is down over 25% since the peak).
Austin is a prime example of what happens when you bring a lot of new housing supply to a market — prices come down. Earlier this year we spoke about apartment rents being down 22% from their August 2023 peak. These effects are also being heightened by increased outmigration from the city (previously the fastest growing US metro area).
Back to the office, I guess.
Even with the declines since 2022, most markets remain up significantly, with many smaller markets like Buffalo and Hartford continuing to show strong year-over-year gains. It is interesting to me that over 5 years later, we are still working through the market distortions brought about by the pandemic. The market is searching for a new equilibrium.
Generally speaking, new homes tend to be priced higher than existing homes. This is, again generally, true because new homes are expensive to build, they're new and shiny, and because oftentimes they're pre-sold, meaning the purchase price reflects some future value.
But interestingly enough, this relationship has just flipped in the US, for the first time in at least 25 years. Here's the chart via Charlie Bilello:
This is, of course, a national average, and every submarket and product type is naturally going to have its nuances. Still, this inversion is noteworthy for a handful of possible reasons.
One, it points to softness in the new-home market. And indeed, homebuilder sentiment is down right now.
Two, it may suggest that homebuilders are building smaller, more affordable homes, which would bring down the median price.
And three, it's an indication of the "lock-in effect" that is prevalent in the US (but that is far less of a factor in Canada, where mortgages typically renew every few years).
For homeowners who are locked in at generationally low mortgage rates, there is a huge disincentive to sell. It would mean losing buying power. So why bother, unless you really have to?
This reduces the supply of existing homes on the market.
According to the Financial Times, Cape Town's population (metropolitan area) grew by 27.6% from 2011 to 2022, landing at approximately 4.77 million. Last year it was estimated at 4.97 million. At the same time, residential property prices increased by about 160% during the period from 2010 to 2024, outpacing all other cities in South Africa. Last year the average price of a home increased by 8.5% in Cape Town versus the national average of 4.5%. And as is the case in most desirable cities around the world, this has some people worried.
But who and what is to blame?
Is it because of tourism? It is estimated that there are some 25,800 active short-term rental listings in the city. Is it digital nomads? South Africa recently launched a Digital Nomad Visa program allowing foreign nationals to live and work in the country provided they can demonstrate an annual income of at least 650,976 ZAR (US$37,500). However, this is a recent thing. Is it foreigners coming with US dollars, euros, and/or pounds? Or is it because of internal migration, which South Africans refer to as "semigration?"
As always, it's a debate. But I think the outcome we are seeing makes intuitive sense for at least three reasons. One, Cape Town is an objectively beautiful and amenity-rich city sandwiched between mountains and the ocean. See above cover photo. It also has a warm and temperate climate. The average high in January (their summer) is 29 degrees and the average high in July (their winter) is 19 degrees. This is a huge competitive advantage — albeit a natural one.
Two, it's a relatively safe place. The above FT article quotes a transplant from Johannesburg saying, "You can't ride your bike in Joburg unless you are in a walled-off estate." If you have the means, that's a strong motivator to move somewhere else. And it's understandably easy to assign a lot of value to safety and security. "Sure, this home may be more expensive, but I can walk to places and ride my bike without fear." That's something worth spending money on.
Lastly, we are all becoming less tethered to specific locations. Digital nomadism and remote work are here to stay. But I don't think this means that people are going to just decentralize and move to the middle of nowhere. I think it means that people are going to increasingly vote with their feet and choose exactly where they want to live their life. What this means is that the need to create better places is only going to become more important. Because more than ever, every place is now in a global competition for talent and investment dollars.
Cover photo by Tobias Reich on Unsplash
But who and what is to blame?
Is it because of tourism? It is estimated that there are some 25,800 active short-term rental listings in the city. Is it digital nomads? South Africa recently launched a Digital Nomad Visa program allowing foreign nationals to live and work in the country provided they can demonstrate an annual income of at least 650,976 ZAR (US$37,500). However, this is a recent thing. Is it foreigners coming with US dollars, euros, and/or pounds? Or is it because of internal migration, which South Africans refer to as "semigration?"
As always, it's a debate. But I think the outcome we are seeing makes intuitive sense for at least three reasons. One, Cape Town is an objectively beautiful and amenity-rich city sandwiched between mountains and the ocean. See above cover photo. It also has a warm and temperate climate. The average high in January (their summer) is 29 degrees and the average high in July (their winter) is 19 degrees. This is a huge competitive advantage — albeit a natural one.
Two, it's a relatively safe place. The above FT article quotes a transplant from Johannesburg saying, "You can't ride your bike in Joburg unless you are in a walled-off estate." If you have the means, that's a strong motivator to move somewhere else. And it's understandably easy to assign a lot of value to safety and security. "Sure, this home may be more expensive, but I can walk to places and ride my bike without fear." That's something worth spending money on.
Lastly, we are all becoming less tethered to specific locations. Digital nomadism and remote work are here to stay. But I don't think this means that people are going to just decentralize and move to the middle of nowhere. I think it means that people are going to increasingly vote with their feet and choose exactly where they want to live their life. What this means is that the need to create better places is only going to become more important. Because more than ever, every place is now in a global competition for talent and investment dollars.
Cover photo by Tobias Reich on Unsplash
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