The Most Splendid Housing Bubbles In America Authored by Wolf Richter via Wolf Street , In 27 of the 33 big and expensive cities we track here, mid-tier home prices in March were down from their respective peaks in prior years, led by Austin (-26%), Oakland (-25%), and New Orleans (-19%) . Now also filtering into these mid-tier home prices is the “mansion shortage” in San Francisco, the epicenter ...
The Most Splendid Housing Bubbles In America Authored by Wolf Richter via Wolf Street , In 27 of the 33 big and expensive cities we track here, mid-tier home prices in March were down from their respective peaks in prior years, led by Austin (-26%), Oakland (-25%), and New Orleans (-19%) . Now also filtering into these mid-tier home prices is the “mansion shortage” in San Francisco, the epicenter of the AI investment bubble. Total employment in the city dropped and the unemployment rate ticked up. But a relatively small number of super-highly paid people get hired by AI companies, and they’re chasing down expensive homes, and there aren’t enough expensive homes for sale, and so they throw easy-come-easy-go money around in the realm of mid-tier homes and drive up their prices. Despite the recent spike in mid-tier home prices, they’re still 11% below the all-time high of 2022. By contrast, prices dipped in San Jose, where mid-tier homes are even more expensive than in San Francisco. For one of the 33 cities, Boston, the jury was still out for March. April 2025 was the all-time high, and in March 2026, prices were down year-over-year by just a hair, and down by 1% from the high in April, but this is too close to call. And in five of the 33 cities, prices rose to new highs in March, seasonally adjusted: New York City, Chicago, Philadelphia, Minneapolis, and Omaha. But price increases have been much slower than in the crazed free-money days of 2021 and 2022. In the two years between mid-2020 and mid-2022, all of these cities had seen huge price spikes, some of which qualify for “price explosions”: Austin +62%, Phoenix +60%, Fort Worth +50%, Raleigh +49%, and Sacramento +39%. Those price explosions were fueled by the Fed’s reckless free-money policies , which included trillions of dollars of purchases of Treasury securities and mortgage-backed securities, which led to the below-3% mortgage rates, even as inflation was raging at the time toward 9%, which led to crazed FOMO...