It’s everybody’s favorite time of the month again. That’s right, time for the latest data from the Case-Shiller Home Price Index. According to July data,
Down 0.1% June to July.
Down 0.3% June to July (seasonally adjusted)
Down 15.3% YOY.
Down 22.3% from the July 2007 peak
Last year prices fell 1.0% from June to July (not seasonally adjusted) and year-over-year prices were down 8.2%.
Since the national media outlets will no doubt be crowing once again about a month-to-month increase in the nationwide 20-city index, here’s a new chart to kick things off: every city’s percentage change from June to July (taken from the non-seasonally-adjusted data, since that’s all the national media usually reports on):
So, there’s that.
Here’s our offset graph, with L.A. & San Diego time-shifted from Seattle & Portland by 17 months. Still the summer of improvement on this one, with Portland up to -13.9%, Los Angeles at -14.9%, and San Diego again coming in better than Seattle at -12.3%.
Note: This graph is not intended to be predictive. It is for entertainment purposes only.
Here’s the graph of all twenty Case-Shiller-tracked cities:
In July, twelve of the twenty Case-Shiller-tracked cities experienced smaller year-over-year drops than Seattle (vs. ten last month). Cleveland at -1.3%, Dallas at -1.6%, Denver at -2.9%, Boston at -5.0%, Charlotte at -9.0%, Washington, DC at -9.8%, New York at -10.0%, Atlanta at -12.1%, San Diego at -12.3%, Portland at -13.9%, Chicago at -14.2%, and Los Angeles at -14.9%. Vegas held the #1 spot for the largest year-over-year drop, with prices still falling over 30% in a single year down there.
Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.
In the two full years since the price peak in Seattle prices have declined 22.3%. We still haven’t quite moved over to the DC trend, but the summer of flatline prices did at least move Seattle off the Phoenix price drop trend.
The following chart takes the post-bubble years of 2007, 2008, and 2009 and indexes each January’s Case-Shiller HPI to 100 so we can get a picture of how this year’s declines compare to last year:
Still slightly below where we were this far into last year, at just over 3% off January.
Here’s an update to the Case-Shiller vs. NWMLS median chart. The following chart shows Seattle-area 2009 home prices, indexed to January = 100, as reported by the NWMLS and by Case-Shiller.
While Case-Shiller has been mostly flat since March, the NWMLS median has been swinging all over the place.
Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.
(Home Price Indices, Standard & Poor’s, 09.29.2009)
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Actually I couldn’t resist being the 100th comment.
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RE: Kary L. Krismer @ 99 – That whole PE analysis…
If you expect earnings to increase, then you’ll buy even if the PE is high, as you expect the PE to adjust downward in the future, or alternatively, the stock price to increase upward.
Using historic PE to predict the future earnings is difficult.
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RE: David Losh @ 101 – Maybe this post should be tagged “100 comments?”
I’m looking forward to hearing more about your pricing model!
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#88 – buy sumthin tiresome
How can one forget the foolish little wife? Presumed by ye moguls (or pigs of the chauvenist variety) to be of miniscule mind. Yes, the little dingbat does need shelter, financial support and a wiseman, no doubt about it: Barbie loves to shop for shiny things. I don’t know any of this variety of woman…yet, this thread of ignorance is alive and well…some myths live on in the comfort of cavalier disparagement and it is terrific not having to know ye or the mentally challenged little lady in reference..
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Hey Joness, I am the wife and I did not encourage us, my husband and I, to commit financial suicide. I pay my bills and don’t over spend. I don’t like debt anymore than you do. Oh and I also have two kids. Believe me I would love a house and not for status. I want a house so I can do with it what I want. If I want to paint crazy colored walls I can do it. If I want to ad solar panels I can do it. Landlords are a pain in the neck. On the flip side I also don’t like over paying for stuff so we will wait to buy. Okay I may be in the minority as far as wifes go but watch it with the stereo types.
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RE: Urban Artist @ 105 –
Just for clarification’s sake, it was not Jonnesss who made the ” wives” remark, but buystocks in post 88.
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yep, it was me. poor humor. should of stated significant other, rather than wife.
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With Seattle prices flattening out is now the time to jump in for a 1rst time home buyer?
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What months are the best to buy? Could some of the summer flatline be seasonal from family moves before school starts? Is winter the best time to buy historically. Trying to time the market. Maybe we have hit bottom.
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Doug,
As I mentioned in the Forum to John, have patience, get your financial snapshot more crisp (actually getting pre-qualified) and be flexible in your search (you may find a very good property that may not be in your primary search area).
Timing? I can’t foresee this market moving upward anytime soon unless interest rates drop further and world peace breaks out and employment improves and peoples balance sheets improve by debt levels dropping etc….
You want to see the bottom? See if I’m hiring staff to close transactions. Watch the Title companies closely as I do. We had an increase in transactions (purchase and refinance) over the past several months and hiring has not occurred. In fact, office consolidation occurred as well as a few more layoffs (in title offices) even through this sales improvement during Spring to date. I’m aware of a seasoned vet being let go as recent as the last month or so; time will tell. If we have a stronger than average 4th quarter then there may be something to this Puget Sound market.
All that to say, if you find a place to establish roots and can comfortably afford the home, buy. But snoop on your neighbors first if you can.
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thanks for the help. what are some good resource for a first time buyer?
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Sorry Joness.
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insignificant better describes her.
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By Kary L. Krismer @ 95:
Uh…actually, I didn’t publicly proclaim it was time to sell until late 2007. Unfortunately, you convinced a lot of your clients to buy from 2005 to present who are now stuck underwater and are approaching bankruptcy. And you say I speak nonsense?
In short, if you want to buy a house right now, go ahead. I’ll stick to my own strategies, as my track record is far better than the nonsense you’ve been preaching to your clients in order to pump your personal income stream.
As far as low IQ’s go, I simply pointed out a fact that almost half the population have an IQ of 99 or below. I like facts Kary, which is why I chose to pursue data analysis for a living as opposed to convincing people to buy things.
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By Kary L. Krismer @ 96:
You have a different idea of what desirable is compared to me. IMO, if it’s been on the market over 100 days, it’s not desirable. The bubble is over, and we are experiencing extended disinflation. It’s time to shed yesterday’s mindset and accept the new normal.
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By Kary L. Krismer @ 96:
Hmmm, so during the Great Depression waterfront property didn’t decline in value? Asset prices are not tied to inflation rates?
We had a housing bubble where extremely lax lending standards were tied with a flood of foreign money chasing U.S. housing. Those days are over, and the market is correcting accordingly.
I realize I am being harsh on you about your profession, but it seems to me you are spending a great deal of time and effort attempting to convince people overpriced houses went up in price because they were worth it. I believe that argument has hurt people in the past, and it will continue to hurt people until this economic mess gets straightened out. I’m much more comfortable with the approach of Ira, David, Ray, etc, who tell it straight that the market is a mess, but there are other reason you might want to buy other than price. I’d buy a house myself if I found the right one in this market. It’s just that my gem is a rare bird.
Now is not a good time to buy a house–especially a waterfront house.
If I’d have listened to all of the hoopla about not making land anymore, buy now or be priced out forever, waterfront is rare and will never go down, I’d be underwater and bankrupt like the rest of these fools.
My motivations as a buyer are in direct conflict with your motivations as a seller. Thus, it would be very dangerous for me to take your non-data supported claims seriously.
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By Urban Artist @ 105:
My GF is more thrifty than I am. She spent a lot of time traveling around with me impoverished as I played extremely bleeding edge original music (not much money in that route). She is comfortable going without. As for me, I’m thinking of buying one more house before I die a half century from now, so I want to get a good one. I’m not crazy enough to pay 3x what it cost when incomes were higher than now though. I’m not the brightest post on the fence, but I’m not completely gullible either.
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By Jonness @ 114:
Well first, again I’m not talking just of houses. In fact I was using oil as an example. But if you want to use houses, there were 20 years where your advice would have been bad, and there were people who sold say 7 years ago thinking the prices were at historic highs. Your system has no proven track record and is more often wrong than right.
Second, I’ve not convinced any clients to buy or sell at any time. People come to me either wanting to buy or sell. At best I might try to change their timing on a sell decision slightly, or alter their choice of purchase.
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By Jonness @ 115:
Property in that price range doesn’t necessarily sell within 100 days even in good markets. But in any case, you’re confusing the price something is offered at relative to it’s value (whether it’s a good deal) with whether it’s desirable. Over-priced houses can be very desirable and bargain priced houses not desirable at all.
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By Jonness @ 116:
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RE: truthtold @ 104 –
“I don’t know any of this variety of woman…”
I call B.S. We all know plenty of these kinds of women. They may be rarer than they were 20 years ago but the type is still well represented. Don’t let political correctness blind you to reality.
Personally, I’m married to an engineer/mathematician, so logic goes a long way. But I would never dismiss the influence of the wife, and especially the nesting instinct of a wife/mother-to-be when it comes to pressures affecting the purchase decision.
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I call ridiculous, (small t) titans. Imagine in 2009: women make and contribute to households and decisions.
yowza – many are sole providers. It is disparaging to suggest otherwise.
It is typical that the likes of Scot finds an intelligent exception in their own home and considers this rare. Political correctness my a$$…
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By Kary L. Krismer @ 118:
I think you got that wrong Kary. Your system has not only been proven wrong; it’s led to the greatest financial meltdown since the Great Depression. Our grandkid’s grandkid’s will be paying for following your investment strategy. Your strategy is extraordinarily risky, and has led to a lot of broken minds, broken hearts, broken families, and suicides. This isn’t the first time it was proven wrong. The same investment strategy caused the Great Depression as well. I strongly encourage anyone reading this blog to not take your financial advice seriously.
I’d warn your clients as well, but your conversations with them take place behind closed doors.
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RE: Kary L. Krismer @ 119 – “Over-priced houses can be very desirable and bargain priced houses not desirable at all. ”
No. This does not follow the basic assumption of economics, where everything has some value (in other words, every person wants the home for free). As we increase the price, it becomes less and less attractive, until the point where there is no buyer. If priced too high, the product won’t sell.
In other words, over-priced houses are not desirable. Bargain priced houses are desirable, but only at true bargain prices. If a so-called bargain price home does not sell right away, then it’s not bargain priced.
I love to hear sellers suggest what is a “bargain price.” Comical.
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By Kary L. Krismer @ 120:
By looking at the fundamentals, The Tim started this website and predicted houses in the Seattle area were about to take a major hit. He had plenty of doubters–especially in the beginning before bandwagoners jumped aboard. You call his insight blind luck, but professional investors call it logic.
You should visit patrick.net and read the front page facts on housing affordability. Patrick is another guy who paid attention to fundamental indicators and put up a website predicting this before it happened.
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RE: AMS @ 124 – According to Kary, this house is priced right at market value. LOL! They dropped the price a million, and it’s still rotting. Now that the prime selling season is over, the owners get to head into winter for another round price of drops. Hey, a good agent will tell them to stick to their guns, because it’s normal for underpriced highly desirable houses to stay on the market this long. It’s because they are special. In fact, they should raise the price back up to where it was. It’s worth it!
http://www.redfin.com/WA/Seattle/218-40th-Ave-E-98112/home/139587
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Hey, how about this highly desirable waterfront home in Gig Harbor. It sold for $1,750,000 in 2006. It’s down to $634,900, and it has only been rotting on the market for 480 days. Hey folks, break out your checkbooks. Waterfront never goes down!
http://www.redfin.com/WA/Gig-Harbor/6717-Cascade-Ave-98335/home/2486878
Or if you just love living in sleepy little Gig Harbor where jobs are scarcer than 20-somethings, you might want to pick up this house. The owner bought it in 2001 for $1,074,438. It’s been on the market for 924 days at the bargain price of $4,800,000. That’s only 4 1/2 times as much as the owner paid for it a few years ago when inflation adjusted wages were higher than now. Hey, 3 years on the market is normal for these kinds of houses. The beauty of it is, real estate always goes up, so it’s worth at least 2x as much now than when it was listed. Don’t worry, price is no object because people who buy these kind of houses are not lowly wage earners (ewe).
http://www.redfin.com/WA/Gig-Harbor/7906-Goodman-Dr-NW-98332/home/2485553
It’s a great time to buy a waterfront home, and that’s a great deal! Call my number right away so I can get 3% of the sales price. Hey, waterfront is a great deal right now! Way better than those underpriced REO’s.
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RE: Jonness @ 126 – As I read your message, I was wondering why Kary didn’t buy the place himself. As I read on about the $1M price reduction, I though the price today was like $50 or something. In this case $1M is only less than 10% of the original asking price.
I do have to admit, however, that I didn’t realize we were talking about a $10M home. The volume of sales in the $10M+ market is very narrow. I am going to guess that a home like this could take 2 years to sell, maybe more. It is very difficult to measure the value of very high end homes.
I will say, however, it could be priced to sell within 6 months. Reduce the price enough and it will get sold sooner.
Don’t get me wrong, it looks nice and all, but $10M takes a very special buyer. Probably beyond what Kary is able to buy (I have no inside information on Kary’s financial condition, but $10M is beyond most people; I am only guessing. Certainly this is not a rental unit.)
It’s like offering a Rembrandt to someone for $10,000 who only has $50. It may be a screaming good deal, but if you only have $50, there is a problem…
I will stick by my statement, however, it is very comical to see what sellers think is a “bargain price.”
I also estimate that I could buy 2,000 homes in Detroit for $10M.
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He he, the guy with the last house probably paid that in 2001 for the land and then built the monstrous house on it. This elite “non-wage earning” person is most likely way underwater and near losing everything. It’s not that he won’t drop the price to something realistic. It’s that he can’t.
But remember, waterfront is special. You should buy some immediately. It’s the best bet going. If you don’t believe me, just ask the owners of the houses I linked and their many neighbors.
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RE: Jonness @ 129 – They are not making any more of it… Better get it while you can… Lakefront property only goes up in value… Where are you going to park your boat…
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RE: AMS @ 130 – I’m not sure if there’s room for the boat I’m going to buy. At the rate they are handing out loans on places like this, I can most likely get a 100′ yacht at 0-down. It’s true that I was laid off from my job as a strawberry picker. But I have another 3 months until my unemployment benefits run out. Since Burnbanke has my back, I’m going in with infinite leverage. It’s a sure path to becoming wealthy without actually having to work (ewe).
In all seriousness. These people trying to sell these things must be absolutely horrified. What a horrific nightmare. I can’t imagine buying into all the NAR hype and leveraging up like this right at the peak of the bubble. I don’t feel sorry for the banks, but I do have empathy for many of the people caught in the crossfire. That’s all the more reason to pay attention to the fundamentals and ignore the NAR and its market-hyping groupies.
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RE: Scotsman @ 121 –
I recently showed a married couple a home. I’d never showed them a home before, and they hadn’t been looking before. The home was in decent shape, kind of ugly and tackily remodeled but at a relatively low cost. At the end of the visit, the husband blurts out “We should make an offer on this one.” His wife stood there open mouthed and amazed at that statement.
And me, despite smelling the dollar signs, said ” Look. You haven’t looked at any other houses. You have to look at other houses so it can become clearer what you want and don’t want. Your wife has the sense to not make an offer on the first house you look at. Take your time. Nobody’s pointing a gun at your head and ordering you to buy a home now.”
Mr. Real Estate Agent at it again, talking yet another couple out of making an offer.
So sure, there are women with nesting urges who want to settle down and buy a home. And there are idiot guys out there too who want to make offers on the first house they look at, even if it’s tackily remodeled and ugly.
Maybe he considers the home buying process torture, and just wants to get it over with. Your choice, Bub. Waterboarding or looking at houses.
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Ira,
While lurking on this blog for what seems to be an eternity, I have followed your comments with great pleasure. Not only do you have a delightful, quirky sense of humor that I find very appealing, you also appear to be an agent with a great deal of integrity and one who is fully aware of the realities of the current market.
When my husband and I are ready to buy, I will be sure to seek you out. I wish I knew exactly when that will be, but like several (many?) others who follow this blog, we are also watching the market and the economy closely to try to determine the best time for us to buy our first home. We feel wary and not very optimistic…and certainly called BS on the “free money” (aka the $8K home buyers credit) being hyped to us by some of our Realtor(R) acquaintances. (I would hesitate to call them friends…)
In the meantime, my Mister and I will keep renting, living within our means, not acquire any new debt, and squirrel away even more $$ to our down-payment fund.
P.S. Waterboarding was a *close* second for me. ;-)
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RE: Ira Sacharoff @ 132 –
Ira, I don’t mean to pick on the ladies. And there are plenty of idiot guys out there- I’ve even played the roll myself. But It seems to me your buyer was either a real decision maker, or just tired of shopping. I’ve been there too. ;-)
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RE: Scotsman @ 134 –
Women are the decision makers in a home purchase.
Men have ego involved that has traditionally clouded the process.
That’s why there are so many women who do well in this business.
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RE: David Losh @ 135 –
I can understand how that would be true. I think i remember reading that women control 2/3 of car purchase decisions too.
If momma ain’t happy, ain’t no one happy. Funny… because it’s so true!
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RE: Scotsman @ 136 –
When a man comes in to a Real Estate office and says he has $10K to put down on a house you know he has less than $5K and a truck payment he won’t tell you about. When a woman comes in and says she has $10K to put down you know she has more than $20K and no debt.
The woman is usually prepared and the man is hoping for the best.
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