Tim – This probably goes in the who gives an RA file, and I’m not sure that it’s truly responsive to Kary’s question, but I think that you’re answer probably oversimplifies the CS methodology and may be missleading. If you go to the “Overview” page on the CS link, and scroll down to the bottom, there is the pdf link to “S&P. . . Methodology.” On page 18 (I know you probably read it too) at the beginning of the second paragraph under the heading entitled “The Divison of Repeat Sales Pairs into Price Tiers” it says:

“Note that the allocation into tiers is made according to first sale price. Individual properties may shift between price tiers from one sale date to the next. We use only the first sale, ignoring the tier of the second sale. This allocation was chosen so that each of the tier indices closely represents a portfolio of homes that could be constructed on each date using information actually available on that date.”

As you know, the CS report uses paired sales for the same piece of property. A current sale is matched with a prior sale for the same property. If I understand the division into tiers correctly, it means that the assignment to a tier is based on the oldest sale of the pair in question, based upon which tier (third) that sale fell into at the time it was made. If that is the case, then the pool of sales in each tier when the 2nd sale is made (the current sale of the property) can be more or less than a third of the current sales. If so, it still leaves us with the question, ” where do the tier division numbers of 271K and 395K come from, because if my interpretation is correct, they don’t necessarily represent the break points for thirds of the total sales for the current reporting period.

Sadly, even if I am correct, I doubt that the above information is of any real value to anyone. Just thought I’d let you know you might be wrong about something completely immaterial.

“So if there were a total of 90 sales, the low, mid, and high tiers are determined by simply taking the bottom 30, middle 30, and top 30. So the sample size is the same for all three tiers. ”

The drop in the high tier is being complicated by the shift in mix. With so few high end houses selling, the reported number for the high tier consists of houses that would have been middle tier at a time when sales were more balanced.

Yeah right! So, when people were forking out a million bucks for houses on the east-side at more than 300$/sq ft, that was the time when sales were more “balanced”.
Actually, I think the Case Schiller tiering system is fantastic. If pink-pony-priced houses are not selling at pink-pony-prices it immediately shows up in the respective tiers. If no one was complaining when all the tiers were moving higher, no one should complain when they are (rightfully) moving lower.

I have said it before and I will say it again… Owners, Sell now or be priced in forever.

Is that second derivative steady or increasing? AAckk!

At first I thought this was an amusing geeky extreme exaggeration. But Scotsman is right if you consider the % of value lost month-to-month. It seems to have accelerated from December to January.

In other words, Seattle housing lost X dollars of value in December, then lost X dollars more in January. But because the value at the start of Jan was lower than in Dec, that X dollars is a greater percentage drop in Jan.

I know there are all kinds of seasonal affects that mean one should not read to much in to month-to-month comparisons, but it would be quite the discontinuity to see that graph flatten out and show a bottom for the next month, eh?

I saw this little gem that seems to be affecting our region due to the economic downturn. Looks like people are bringing their boats (bought with HELOC’s) into the sound, putting a few bullet holes in them, and then trying to claim insurance…

http://www.cnbc.com/id/29991233/

So that’s where all the boats are!

A couple of years ago, finding a boat slip in the Seattle area was a real chore and often involved long waiting lists. The other day, I checked Salmon Bay Marina web site and they look 30% empty.

http://salmonbaymarina.com/slipmap.html

I looked, but I couldn’t see the bottom!

You are my hero!

The drop in the high tier is being complicated by the shift in mix. With so few high end houses selling, the reported number for the high tier consists of houses that would have been middle tier at a time when sales were more balanced.

http://www.cnbc.com/id/29991233/

My guess is that the reason we are seeing a different pattern between high and low is we haven’t seen the spike in foreclosure that they have, yet. So the low-end still doesn’t cash flow for investor/slumlords.

The “high-end” decline could be being driven by the East-side bloodbath, but who knows. Why anyone would pay a million for anything in Kirkland or Edmonds is beyond me, and my guess is other buyers are starting to ask the same question.

RE: Slumlord @ 2 – Here you go.

I’d like it better if it was someone riding a pink pony on the way down. Now that would be kick a**!

The only reason I looked was I was trying to see how many sales their high tier would be, since there were only 20 sales in all of King, Pierce and Snohomish during January over $1,000,000. I was thinking they might not have a good sample size, but going all the way down to $395k they would.

I think if they used a higher upper limit the upper tier would be showing much more poorly.

oh shoot, it’s just April fools.