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Canadian Housing is Being Propped Up by Just One City [Chart]

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Canadian Housing is Being Propped Up by Just One City [Chart]

Canadian Housing is Being Propped Up by Just One City

Without Vancouver’s gains, the market would have dipped -1.1% in February 2016

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

“Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes

The last time we gave a good run down of Canada’s housing market was in May 2015, when we noted that The Economist gave it the dubious title of the most overvalued housing market in the world. Since then, in just 10 months, prices in Vancouver and Toronto have soared to marks that are 14.1% and 8.7% higher respectively.

Frothy prices, million-dollar shacks, and buying frenzies have prompted world-class short-sellers to come out of the woodwork. For a speculator such as Marc Cohodes, who advises hedge funds on Wall Street that want to bet against the Canadian housing market, this type of classic bubble behavior is music to his ears.

“The cross currents are beyond crazy in Vancouver — it’s a mix of money laundering, speculation, low interest rates,” says Cohodes, who was once profiled as Wall Street’s highest-profile short-seller by the New York Times. “A house is something you live in, but in Vancouver you guys are trading them like the penny stocks on Howe Street.”

Mr. Cohodes has recently said that Canadian real estate has reached “peak insanity”, and it’s part of the reason that investors around the world are trying to find a way to bet against the market.

Home Capital Group, one of Canada’s largest financial institutions, was one of the most-shorted stocks last year on Canadian exchanges. The same alternative mortgage lender recently also came under scrutiny for suspending 45 of its brokers for falsifying borrower income.

Dominos Falling

Just as falling oil prices helped to drag the Canadian dollar down, the “lower for longer” price environment for crude has had a similar effect on house prices in the Prairies. Homes in Fort McMurray, the epicenter of the Canadian oil sands, have crashed an average of $117,000 in just a year.

Meanwhile, price tags in the once-strong housing market of Calgary have declined from their peak in October 2014 by -5.4%. The city, which is a financial center for Canadian energy, is bracing for a particular tough year ahead as well. Houses are spending more time on the market, and sales volume and prices continue to fall.

But it’s not just Canada’s oilpatch that is starting to see the writing on the wall. Toronto, which has helped to buoy the rest of the country’s housing growth for years, has also started to cool down.

According to the Teranet – National Bank House Price Index, prices have risen just 0.3% since October in Canada’s largest real estate market. With the prospect of rising interest rates in the future, it’s not expected to heat back up, either. In fact, TD Bank expects that Toronto will have a “moderate” decline in 2017.

And Then There was One…

For investors bullish on near-term gains in Canada’s housing sector, there is one last hope that resides on the West Coast.

Vancouver’ housing market sailed again in February, shooting up a record 3.2% in just one month. This is the best month for the market since August 2006. It was so good, in fact, that it single-handedly propped up Canada’s national index for housing.

Canada’s market as a whole saw gains of 0.6% in the month, but it would have dropped to a lacklustre -1.1% without the inclusion of Vancouver in the 11-city index.

The only problem?

The city, which has been a primary beneficiary of rampant foreign buying, is continually cited as the market most ripe for a deep correction, as it continues to defy all common sense.

While Keynes is right in that markets can remain irrational for longer than one can stay solvent, it seems that Canadian housing has turned a corner: regional markets in other parts of the country have stumbled, and the last remaining pillar is Vancouver.

It may continue to buck the trend for now, but it is a wobbly pillar at best.

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The Fastest Rising U.S. Housing Markets in 2024

As U.S. home prices hit record highs, which housing market is seen the fastest growth? This graphic shows the top 10 across the country.

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This bar chart shows the U.S. housing markets with the fastest rising home prices in 2024.

The Fastest Rising U.S. Housing Markets in 2024

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

The U.S. housing market has been on a tear, with median sales prices rising more than 40% since February 2020.

While cities in southern states like Florida have witnessed some of the strongest price growth, more affordable cities across the Midwest are also seeing growing demand as buyers seek out cheaper options.

This graphic shows the U.S. metros with the fastest price growth, based on data from Redfin.

Hottest Housing Markets in America

Below, we rank the metropolitan areas with the fastest annual median sales price growth as of February 2024:

RankMetroMedian Sales Price Growth
Feb 2024 YoY
1Pittsburgh, PA+22.0%
2Fort Lauderdale, FL+18.0%
3Greensboro, NC+17.8%
4Meridian, ID+17.3%
5Toledo, OH+17.0%
6Boca Raton, FL+16.4%
7West Palm Beach, FL+16.1%
8Orlando, FL+15.9%
9Milwaukee, WI+15.6%
10Alexandria, VA+15.4%
U.S. average+6.5%

Pittsburgh, PA soars to the top of the list, with median sale prices jumping 22% over the year.

Once known as a center for steel and iron manufacturing, the city has emerged as a hub for high-tech industries including robotics, software engineering, and healthcare. At a time when housing affordability is near record lows, buyers have flocked to the market thanks to its lower home prices. In February, median sales prices in Pittsburgh were $250,000 compared to the U.S. median price of $412,219.

Following next in line is Fort Lauderdale, FL with prices jumping 18% annually. Like several cities across the state, property values have boomed thanks to the state’s warm climate and low taxes. The state also ranks as one of the best in the country to retire. In 2023, it was one of the fastest growing states in the country, adding 365,205 residents overall.

As we can see, just one housing market in the West, Meridian, ID, is experiencing some of the strongest price growth in the country. Since the pandemic, many Californians priced out of expensive real estate markets have moved to the state due to its strong job market, low crime rate, and affordability. In fact, Los Angeles and San Fransisco are some of the top metropolitan areas nationally that people are moving away from due to remote-work trends and the high cost of living.

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