I haven’t checked any other cities. I haven’t found the data I need to do all 330 cities I track, so I might make a dynamic chart for WA and a few other states I have data for.

Another Tim: That’s a good idea. Adjusting down using compound inflation each year, you would have lost approximately $105K in actual value if you bought a median priced Seattle house in q2 2008 instead of q1 2000.

Here’s the inflation data I used to do the math:

http://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp

I think it’s situation dependent. But one situation that comes to mind is the following:

If you compare the rise in median household income to the rise in median home price, you’ve lost big time .

Here’s my thinking:

According to Global Insight, in Q2 of 2008 the Seattle median house price was $395,000.00. In Q1 of 2000, it was $212,000.00.

Thus, if you divide the 2000 median house price by the 2000 median household income, you get 3.78.

212000 / 56106 = 3.78

So take the 2008 median household income and multiply it by 3.78. You end up with $260,185.00 in value.

68832 * 3.78 = 260185

Now subtract the actual cost of a house in q2 2008 from the actual value of the house had in q1 2000 adjusted for inflation.

395000 – 260185 = 134815

If you bought a house in Q2 2008, you’ve lost $134,815.00 in 2008 dollars. If you bought at the peak, you actually lost more than that. Thus it is quite understandable that we are seeing house price depreciation during this recession, and we will see a heck of a lot more due to hard times as well as lending standards tightening even more than they were in q1 2000.

A similar analysis can be carried out for any city in America. I have been attempting to automate this process for the 330 cities I track, but I haven’t found reliable data that can be directly compared yet.

Median Household Income source: http://www.ofm.wa.gov/economy/hhinc/medinc.pdf

I need to go visit Tuscon more. My grandparents lived there and I’m also told Scottsdale is wonderful. But, I still like the 3.5 hour drive from Carson to the Bay Area and 45 min drive to Lake Tahoe. In less then 8 years I will be most likely be living in Dayton, Gardnerville, or Minden Nevada running the 500 Realty office out of Carson City or doing my nursing again .

After leaving Seattle I will not live in a big city. Phoenix and Vegas are out of the question. You couldn’t pay me to live in Sacramento 20 years ago, and most certainly not now.

No, prices aren’t really dropping. It’s all propaganda.

I dont think so – I have been checking the websites of RedmondRidge,Camwest builders. Particularly camwest has not reduced prices.

Are the slow sales due to prices not dropping (or) Are these builders fooling with these huge numbers on website, where as in reality accepting bids much lower than those prices listed on the website.

I am confused.

But then you have to factor in the people. Californians are a different breed.

To me its really easy to call the RE bottom in prices in Seattle.

When we depopulate the credit crisis, we can start to flatten out and hit bottom.

If we try to grow out of it, it will continue to worsen, without end. We’re simply out of fish, lumber, water, oil, etc; and adding growth on more unending debt in America is clearly unsustainable and totally unworkable.

Calling a bottom in RE is easy. Rent equivalence or better and flat prices for a year. Has worked almost without fail since WWII.

Couldn’t agree more about Sacto. Hubby and I were there in May and you’re right on. What a wasteland of junky look-alike homes. Sun or no sun, I don’t care how close it is to CA wine country, you couldn’t pay me to live there with even higher taxes and inefficient government. Not a lot of jobs either. They are so messed up. Even their gated communities have gates on them. Who the ? do they think is coming to steal their ugly stuff anyway?

I once saw a comparison of Roseville (suburb of Sac) to Redmond. When we were there we drove through it and the big event in town was being sponsored by the bail bondsmen. No way is Roseville even close to Redmond, more like Kent or Burien.

AZ is another heavily hit state. My dad lives just outside of Tucson. He says there are good signs there that things are leveling off but that’s because it was never as overbuilt as Phoenix and less expensive to begin with.

Hey, at least people can stay in their house for Christmas.

S&P Set To Launch New Indexes of Condo Prices

Standard & Poor’s, publisher of the closely watched S&P/Case-Shiller Home Price Indices, is set to launch on Nov. 25 new indexes that track condominium prices in five major metropolitan markets—Boston, Chicago, Los Angeles, New York and San Francisco.

That is not the only move building on the popularity of the Case-Shiller indexes. For every season … there will be more real estate indexes from S&P. The company plans to create seasonally adjusted versions of the existing Case-Shiller indexes, that cover the residential real estate markets in the U.S—the 10-City, 20-City and National Composite indexes. S&P will also create seasonally adjusted versions of the three new condo indexes.

The existing Case-Shiller indexes are about to get even more exposure as they enter the exchange-traded funds world through MacroShares portfolios. These funds are not only unique for targeting the niche residential real estate indexes, but will launch using an initial public offering process never before used by the ETF industry (see story here).

David Blitzer, managing director & chairman of the Index Committee at Standard and Poor’s, said in a statement that condo prices behave very differently from residential home prices, and that the condo indexes will provide property owners and investors a more complete picture of the U.S. housing market, as well as more specific takes on relative real estate performance.

The condominium indexes covering the five major metropolitan areas will include historical data beginning in January 1995. The seasonally adjusted data will have the same history as its underlying index, which for the existing Case-Shiller indexes, goes back as far as January 1987.

The new indexes will be part of the supplemental home price data series that are normally available by 9:30 a.m. on the last Tuesday of every month.

http://seattlepi.nwsource.com/business/388778_realestate21.html

In which he does find RE people who will somewhat admit Seattle is finally catching up with rest of the US; but even then, the RE pundits can’t help themselves from tacking on admonishments abt the specialness of Seattle – things won’t get as bad here, things are already looking up here and of course the old favorite: Seattle has RE opportunities for developers; that have lots of cash!

As I’ve posted in reply to Cohen’s articles, I’d sure have a lot more faith in his speculations and reporting if he was not entirely dependent on the RE industry itself for all his quotes and stats.

But if he won’t give them the spin they want, I suppose he doesn’t get invited to these conferences and breakfasts?

Memo to employees (source: Seattle PI) sent yesterday.

http://blog.seattlepi.nwsource.com/aerospace/archives/155052.asp

There is really only one factor driving prices down, everywhere.

Prices were too high. Period.

When the Option-ARM trade-up buyers get hit, the higher end will start to come down more. It really hasn’t fallen far at all and sales in decent areas are slow. When high end foreclosures flood the market (I’m seeing more and more) and people start buy in that segment again, the median price will rise. It doesn’t mean that the market still isn’t falling however.

It spreads like a cancer. Starts at the bottom and works it’s way up.

You don’t live in Maple Valley by any chance????

EconoE: I’m glad you got a kick out of that statement. I agree with your analysis (further deprecation will occur in the bubble states). However, there is a large disparity between the amount the leading bubble states have corrected and the amount of correction that has occured in the PacNW.

Many bubbleheads have a long-standing theory that Seattle is lagging the trend; thus, the bubble states are a leading indicator of what will eventually occur in Seattle (large price declines spread out over the course of years). Although, I meet few people who agree with Global Insight’s opinion of where fairly valued and undervalued occur, I believe its analysis has a lot of merit on a relative basis. It does a good job of showing how much relative fat still exists in the PacNW compared to everywhere else. The value in this for me is it allows me to understand what’s going to happen further into the recession when the unemployment rate hits 8% or so. IOW, there is no way the fat won’t eventually get trimmed. Furthermore, it’s common in a correction like this for prices to actually undershoot. So things could get really ugly before it’s all over. I think I’m preaching to the choir here though.

I think it’s important to keep in mind that much of the correction we’ve seen in the CA, NV, and FL occurred as a result of the subprime engine. We’ve blown through the majority of that mess, and other factors are currently driving prices further down, such as the horrible economy and the upcoming wave of alt-A resets. Who knows, if it gets cheap enough in Santa Barbara, I might end up relocating there. I’m quite fond of that place.

Just as an aside a property near my house has had three offers. The buyer and seller were $4K apart on the last offer and when the seller refused to go down the $4K more the buyer walked.

Yeah…sure…if you want to live in the desert exurbs or some other “chocolate” hole.

Fact: Washington is still above those other markets.
Fact: Sales are down so much because prices haven’t dropped very much.
Fact: I have a pink pony and I call him George.