The ripple effect of housing price movements between cities has been extensively investigated, but there are relatively few studies on this topic within a metropolitan context, especially at the submarket level. This paper describes the use of ripple effect theory to examine the diffusion process and convergence of intra-urban housing prices at the submarket level in Shanghai, an emerging global city in China. The analysis is based on directed acyclic graphs, local indicators of spatial association time-paths, and a recently developed convergence test. The empirical results of grouping analysis identify 25 submarkets in Shanghai, and the diffusion of housing prices between these submarkets is found to be caused by both geographical and economic proximities. There is also a complex recursive process of price spillovers from high- to low-priced submarkets, and vice versa, which contributes to the spiraling local housing prices. Housing prices diverge across all submarkets, and the whole market can be divided into three convergence clubs. Finally, these convergence clubs have a circular structure with a degree of continuity. This study broadens our knowledge of the price interrelationship among housing submarkets at the intra-urban level. These findings have profound implications for urban planners, policy makers, and local residents.