Case-Shiller: Seattle Home Prices Still Hitting New Lows

Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to November data,

Down 1.1% October to November.
Down 4.7% YOY.
Down 26.4% from the July 2007 peak

Last year prices fell 0.5% from October to November and year-over-year prices were down 10.6%.

November’s data marked another new post-peak low point for Seattle home prices. Prices are down 3.7% since July, and down 5.3% since their late-2009 tax credit mini-peak.

Here’s an interactive graph of all twenty Case-Shiller-tracked cities, courtesy of Tableau Software (check and un-check the boxes on the right):

The 10-city composite index joined the 20-city index in negative YOY territory, and the same four cities as last month are still above where they were this time last year: Los Angeles, San Diego, San Francisco, and Washington DC.

In November, fourteen of the twenty Case-Shiller-tracked cities experienced smaller year-over-year drops (or saw year-over-year increases) than Seattle (one more than October):

  • Washington, DC at +3.5%
  • San Diego at +2.6%
  • Los Angeles at +2.1%
  • San Francisco at +0.4%
  • Boston at -0.8%
  • New York at -1.9%
  • Denver at -2.5%
  • Las Vegas at -3.5%
  • Miami at -3.5%
  • Tampa at -4.0%
  • Dallas at -4.2%
  • Charlotte at -4.3%
  • Minneapolis at -4.4%
  • Cleveland at -4.4%

Falling faster than Seattle as of November: Phoenix, Portland, Detroit, Chicago, and Atlanta.

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of the raw Case-Shiller HPIs.

Here’s the interactive chart of the raw HPI for all twenty cities through November.

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.

Case-Shiller HPI: Decline From Peak

In the forty months since the price peak in Seattle prices have declined 26.2%, another new high.

For posterity, here’s our offset graph—the same graph we post every month—with L.A. & San Diego time-shifted from Seattle & Portland by 17 months. All four cities continued to fall in November. Year-over-year, Portland came in at -7.0%, Los Angeles at +2.1%, and San Diego at +2.6%.

I think this graph is still worth posting if only to display how the government’s massive intervention in the market screwed with the natural flow, causing all the markets to rise simultaneously, and once the artificial support was removed, to come crashing back down to reality simultaneously.

Case-Shiller HPI: West Coast

Note: This graph is not intended to be predictive. It is for entertainment purposes only.

Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 01.25.2010)

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

81 comments:

  1. 1
    Feedback says:

    Congratulations! This is excellent news for men who have chosen to accumulate wealth in other vehicles so that we may purchase property at a discounted price.

    I am particularly intrigued because sales of existing homes rose a seasonally adjusted 12.3 percent from November to December. That was the fifth adjusted monthly increase in the past six months.

    I had coffee with my friend Larry and I asked him about the men I know who rent. “The pattern over the past six months is clearly showing a recovery,” he said, sipping his single-origin Guatemalan. “The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain.”

    Larry also noted that in King County, home sales rose a unadjusted 33 percent from November to December.

    Imagine that, Tim: without any tax incentives, what has typically been the coldest month of the year was unexpectedly hot for buying real estate. And I don’t think we’re just talking about Chanukah gifts!

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  2. 2
    ray pepper says:

    RE: Feedback @ 1

    Larry, whats with all the “men who rent” and “”men who accumulate wealth” …Missing a major demographic here kinda like our old “George Bush truck.”

    Anyway, as soon as these Foreclosures kick into high gear from BAC I assure you that were going no where but down down down…Unrelenting thousands coming because we all know….”people will only remain stupid for so long”….even after Loan Mod they will NOT remain stupid. They are ALL coming back in 2012-2015+!

    Lets get those NOD’s out and get this party of misery started.

    Rate this comment: Thumb up 0

  3. 3
    ray pepper says:

    all home sellers will be termed “distressed” for they simply will not have a chance to “unload” in the coming years…..http://money.cnn.com/2011/01/20/real_estate/shadow_inventory_rise/index.htm?iid=EAL

    **wild card**FED** bring on the stimulus like u never have before and/or universal cramdown of principle on the millions of upside down homeowners..**

    Rate this comment: Thumb up 0

  4. 4
    EconE says:

    RE: Feedback @ 1

    I ran into this strung out looking homeless dude on the street, and as he took a swig off whatever he had in his brown paper bag he went on tell me about how he used to be a mortgage broker and how much he missed snorting lines of single-origin Guatemalan blow off his REagent girlfriends a**.

    I asked him what his opinion of the market was and he said “Dude, there are soooo many people that I know that haven’t made a payment on their OptionARM mortgage for over a year and they *still* haven’t received a NOD from the bank”. After taking another swig he went on to say, “They tried renting their places out but nobody was calling them as they were asking waaaaaay too much”. Another swallow and a wipe of the mouth on his shirtsleeve later, he finished up with “They’re all f***** when those ARMs recast.”

    Imagine that!

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  5. 5
    eastside reader says:

    Is there any way to see Eastside vs Seattle data?

    Rate this comment: Thumb up 0

  6. 6
    Feedback says:

    RE: EconE @ 4 – Econe, you shouldn’t be talking to men like that. They can be dangerous. For example, that man taught you to spell swear words poorly, omitting important letters like “ss” and “ucked.”

    Rate this comment: Thumb up 0

  7. 7
    The Tim says:

    RE: eastside reader @ 5 – Not with this data, no. Case-Shiller is a broad, region-wide index of home prices. For more regional data, check out our monthly Redfin maps. December’s will be posted later this week.

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  8. 8

    RE: Feedback @ 1

    Down the Road

    The only prices sky-rocketing are gas and food, but not to worry, even though these two naughty kids’ budgets make up over half of many incomes’ net pay; but alas, it’s conveniently eliminated from the COLA equation….LOL

    But in this “hidden stagflation” we’re in with 17% U6 unemployment, what direction will interest rates on home mortgages go when Helicopter Ben can’t QEC anymore, possibly this June? Only one direction, up sharply. Good news: if gas hits $4.50-$5 gal again, it killed demand of everything, forcing an imminent oil price collapse right after the oil price surge, IMO.

    When you see recent Chinese and Brazilian type massive interest rate surges incorporated in America to combat real inflation, what direction will home prices have to go in the future? LOL

    Rate this comment: Thumb up 0

  9. 9

    While you all go gaga over this, I’ll just point out that this data puts the C-S data closer to the NWMLS mean (by difference from peak) since it’s been since May, 2010, and closet to the median since November, 2009.

    Stated differently, we’ve known this for a month and a half–back when the NWMLS released it’s November data. That was a new low for the median that month too.

    Rate this comment: Thumb up 0

  10. 10
    sallybuttons says:

    RE: Feedback @ 1 – You are correct…we are lacking in man-stats. Give me man charts and make it quick.

    Rate this comment: Thumb up 0

  11. 11
    Hal (GT) says:

    So where does this data leave us when considering the double dip possibility? Add to it that unemployment continues to stagnate, I’m not too happy about the economic outlook. But then I live in Florida and the housing market continues to look nasty.

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  12. 12
    chico says:

    Neighbor owed around $550K on his place and it sold as a short sale for $330K.

    That was back in September.

    The guy that bought it was new to the landlord business. He tried renting the place for $1800 per month and was managing the place himself. That didn’t work, so he lowered his asking price to $1650 per month. That didn’t work either.

    He fianlly gave up and turned the property over to a professional management company, they are asking $1700 per month.

    That still isn’t working.

    Stay tuned!

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  13. 13
    The Tim says:

    By Hal (GT) @ 11:

    So where does this data leave us when considering the double dip possibility?

    Nine of the twenty Case-Shiller tracked cities (including Seattle) hit a new post-peak home price low with this latest data, and all but one (San Diego) decreased between October and November.

    As far as home prices are concerned, a double dip is no longer a possibility, it is reality.

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  14. 14
    chico says:

    RE: sallybuttons @ 10

    I got your man-stats right here Sally.

    HeHeHe!

    Rate this comment: Thumb up 0

  15. 15

    RE: The Tim @ 13
    Yes Tim

    The dreaded RE price double dip was suppose to go away, like the Recession was suppose to go away because unemployment was just a lagging indicator. LOL, and the clowns at the circus never spray you with selzer water either….

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  16. 16
    Ben says:

    RE: EconE @ 4 – On behalf of all men who rent, thanks for the laugh this morning. I needed that.

    I’m waiting to see if we get any sort of spring bounce up or slowly drip into another waterfall around fall. If we get a rise in rates….the waterfall may come sooner.

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  17. 17
    Daniel says:

    By Kary L. Krismer @ 9:

    While you all go gaga over this, I’ll just point out that this data puts the C-S data closer to the NWMLS mean (by difference from peak) since it’s been since May, 2010, and closet to the median since November, 2009.

    Stated differently, we’ve known this for a month and a half–back when the NWMLS released it’s November data. That was a new low for the median that month too.

    [x] you still do not understand why the CS index was introduced

    I give you a hint: They argued that both mean and median price were notoriously bad for their purpose. Consequently they do not measure the same thing. Just read their original paper. It is rather simple to understand.

    Which of the two is useful for other purposes is another question. If your purpose is to estimate how big the foreclosure mess will be, CS may be more relevant (as the value of existing inventory directly influences peoples decision to default). If you look into buying a home the median may be more relevant (as it includes new inventory and is more current).

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  18. 18

    RE: Daniel @ 17 – Well for being so bad, they are incredibly closely correlated to Case-Shiller. If that was their purpose, they largely wasted their time (based on the way it’s behaved post-peak).

    Which gets to the point that some people say Case-Shiller exists so that S&P can sell other products. Very efficient. The banks used third parties like Moody’s to sell their financial products, where S&P brought it all in-house! ;-)

    Rate this comment: Thumb up 0

  19. 19
    Dirty Renter says:

    RE: EconE @ 4

    It was nice to finally meet you, EconE.

    Rate this comment: Thumb up 0

  20. 20

    By The Tim @ 13:

    As far as home prices are concerned, a double dip is no longer a possibility, it is reality.

    That depends on how you define double dip. If it’s any drop after a rise, then yes this would be a double dip. But if it’s dropping below the prior recent low, than it’s not a double dip on either the 10 or 20 city indexes, seasonally adjusted or not.

    If you were just talking about Seattle, I don’t think either the SA or non-adjusted data show any increase that would give rise to a claim of double dip. Seattle has been on a slow decline per C-S the past year or so.

    Rate this comment: Thumb up 0

  21. 21
    Scotsman says:

    This can’t be right- we’re in a recovery- the stimulus worked, unemploment is coming down, banks are flush with cash to lend, pent up demand is knocking on the door and even the all-important port/container shipments index is up. Remember, this is old data from November and doesn’t show that we’ve turned the corner. It’s a greeat time to buy a house! All my man friends told me so. ;-)

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  22. 22
    Scotsman says:

    RE: ray pepper @ 2

    “Missing a major demographic here kinda like our old “George Bush truck.”

    WHAT?! Are you admitting something? How are the trucks?

    Remember, today’s GEM may be tomorrow’s over priced trash.

    Rate this comment: Thumb up 0

  23. 23
    David says:

    So, I guess this means that with the $5K I got back when I took out a loan out for my $350K house last year, I’m only down $12.5K.. Woo-Hoo!!

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  24. 24

    RE: ray pepper @ 3

    Foreclosed Shadow Inventory Yet to be Unloaded

    Nice URL Ray, tells me that about 2 million units haven’t hit the fan yet with Biglot price tags. Hey, that’s about the total number of ALL homes sold in 2010 per Census Bureau:

    http://www.census.gov/const/newressales.pdf

    Sooooo….when you hear this BS about how low the foreclosure rate is [compared to all homes not for sale in America], the succinct comment back should be its rate is about equal to yearly home sales in 2010, so does that make 2010 yearly sales pathetic too? LOL

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  25. 25
    SummitSeeker says:

    RE: chico @ 12
    Chico, are you talking about 2113 41st Ave SW by any chance? Sold for 330k back in the fall, now has a for rent sign in front. Looks like whether he can rent it for the price he wants or not he got a good deal on that house.

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  26. 26

    RE: softwarengineer @ 24

    Another Way of Putting It

    We’re foreclosing on homes in America lately about as fast as we’re selling ‘em…LOL

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  27. 27
    TheHulk says:

    It is weird how perceptions can change.

    About 6 months ago, a colleague of mine (having purchased a house just before the last-ever-tax-credit-steroid-shot) was all gung ho about housing. He was talking about how prices have stabilized and his agent had told him “there has never been a better time to buy etc”. I did point him towards this site but I guess his personal preferences were different.

    In any case I met him today and he was all doom and gloom. His father was berating him after reading in all the MSM about how housing is going south (his father sounded like someone who had read Seattlebubble :) ). I mean I know it has been a slow gradual decline after the sales dropped off a cliff after the tax credit expiration, but it seems like again, everyone is thinking of housing negatively. I wonder how this is going to affect sales and prices in the coming year.

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  28. 28
    Yakima_Hick says:

    Yawn! This is an old news for Novermber Sales. Check out December Sales. A 33% percent spike in home sales Booyah!! Bubblebrains. http://seattlebubble.com/blog/2011/01/05/nwmls-closed-sales-allegedly-spike-33-in-december/#comments

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  29. 29
    ray pepper says:

    RE: Scotsman @ 22

    We sold the Bush Truck to some Leavenworth Theatrical company for there musicals.

    However, rolling out soon will be the new Obama truck with this picture on the sides/back stating: PAY ATTENTION WASHINGTON! ( or something like that) ..

    http://www.popcrunch.com/barack-obama-staring-at-butt-of-16-year-old-brazilian-delegate-mayora-taveras-photo/

    Be patient she will be rolling down a freeway near you soon!

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  30. 30
    Daniel says:

    By Kary L. Krismer @ 18:

    RE: Daniel @ 17 – Well for being so bad, they are incredibly closely correlated to Case-Shiller. If that was their purpose, they largely wasted their time (based on the way it’s behaved post-peak).

    Oh really no difference: As you seem to never have looked at it, lets take this example from [1] but if your timefrae is long enough the same is true for more recent data. The first number is the average ANNUAL change in real price for the median as reported by the NAR, the second is for their repeat sales methodology. The timeframe is roughly 5 years starting from 1981 and differs slightly for the four cities:

    Atlanta: 3.7% 1.0%
    Chicago: 0.8% -0.7%
    Dallas: 3.4% 1.0%
    San Francisco: 2.8% 0.2%

    As you can see, they are perfectly the same…. NOT

    If you were an investor, would it matter if you got a 3.0% return or just a 1.0% return? I think so …

    [1] Case, Karl E. and Shiller, Robert J., (1987), Prices of single-family homes since 1970: new indexes for four cities, New England Economic Review, issue Sep, p. 45-56.

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  31. 31
    Ross says:

    By SummitSeeker @ 25:

    RE: chico @ 12
    Chico, are you talking about 2113 41st Ave SW by any chance? Sold for 330k back in the fall, now has a for rent sign in front. Looks like whether he can rent it for the price he wants or not he got a good deal on that house.

    RE: David @ 23

    My guess is in fairweather complex …

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  32. 32
    Scotsman says:

    RE: Yakima_Hick @ 28

    “This is an old news for Novermber Sales. Check out December Sales. A 33% percent spike in home sales”

    Reminds me of the old joke- “sure, we lose a bunch on each individual sale, but we’ll make it back up on the increased volume.” It’s the new math. Just go borrow some more money to cover the shortfall.

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  33. 33

    RE: Daniel @ 30 – I didn’t say no difference, I said closely correlated. Sometimes the NWMLS is showing a larger drop from peak than C-S and sometimes the other way around. If you picked January 2008 to December 2008, Case Shiller would show a larger drop, but that’s because they were so far apart in January, with C-S being the one that was much higher in January.

    Since the peak, C-S has shown a lower drop from peak compared to the NWMLS King County median 18 times. It’s been a larger drop 22 times. Over that timeframe, the C-S numbers have been over the NWMLS by an average of .215%, which is a fairly nominal difference.

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  34. 34
    Daniel says:

    RE: Kary L. Krismer @ 33 – Again all this proves is that you have no idea what the CS index is meant for: their goal is not to describe short term development but development “over many years”. They point out that short term discrepancies to median house prices are small but that long term discrepancies are very substantial. Anyone in the industry should really know those things.

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  35. 35
    drshort says:

    RE: Daniel @ 34

    People buy and sell options/futures based on the CS index. Their aim is to describe both short AND long term home price appreciation.

    They argue the median is a bad measure because the stock of houses changes over time. For instance, over the last 30 years relatively modest homes in Bellevue/Kirkland/Redmond have been replaced by McMansions. So if you compared the median eastside home price in 1980 to 2010, you’d be measuring price appreciation + a big increase in home quality. CS aims to control for home quality.

    The mix of homes being sold is relatively stable in the short term, so CS and the median correlate very closely over periods less than a few years.

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  36. 36
    Gary says:

    The only demand for the Seattle real estate market is mainly foreign investment coming from Asia/Pacific. I know of active recruiting of chinese and koreans nationals investing minimum of $500K in real estate in conjunction with arranged visas for their families to come to the Seattle area similiar to what happened in Vancouver, BC. Additional demand from first time buyers in minimal to non-existent because entry salaries in available jobs don’t provide sufficient income to purchase (i.e. prices in Seattle at 2005 levels are still too high). Existing owners purchased above their means on the hope of turning a profit and are topped out and trying to hold on. As for supply developers continue to build homes, condos and apartments with lot’s of existing unoccupied supply. And older owners ultimately are deceased or selling to use that equity to buy in a cheaper market (i.e. just about anywhere but here). I wont’ even go into lack of special tax credits, increasing taxes, food, fuel, tolls, fees and interest rates perceived to be going up in the future freezing people from making a purchase decision because of uncertainity. Companies have learned to do with less employees and aren’t going to increase hiring to pre-recession levels anytime soon. This creates an imbalance that’s going to continue to put pressure on home prices downward as everybody is trying to just hold on to the money they have in their pockets today.

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  37. 37
    pfft says:

    By softwarengineer @ 8:

    RE: Feedback @ 1

    Down the Road

    The only prices sky-rocketing are gas and food, but not to worry, even though these two naughty kids’ budgets make up over half of many incomes’ net pay; but alas, it’s conveniently eliminated from the COLA equation….LOL

    no it isn’t. why are you still saying this? the CPI includes food and energy. core inflation does not.

    What goods and services does the CPI cover?
    http://www.bls.gov/cpi/cpifaq.htm#Question_7

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  38. 38
    pfft says:

    By softwarengineer @ 8:

    RE: Feedback @ 1]
    But in this “hidden stagflation” we’re in with 17% U6 unemployment

    can we stop with this too? debunked many months ago.

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  39. 39
    pfft says:

    By Scotsman @ 21:

    This can’t be right- we’re in a recovery- the stimulus worked

    yep. in the last real estate bust housing recovered long after the economy did.

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  40. 40
    pfft says:

    “Case-Shiller: Seattle Home Prices Still Hitting New Lows”

    just barely btw ftw.

    Rate this comment: Thumb up 0

  41. 41
    Jonness says:

    Naturally, prices continue to fall. :)

    “Seattle is one of the worst places to buy a home instead of renting one, according to the new study.

    Seattle ranked second on trulia.com’s list for cities where it is better to rent than to buy. With the average rent ranging from $1,000 to $1,500 and the average home price between $400,000 and $500,000. Only homeowners in New York get a worse deal.

    Only four cities in the study show renting as less expensive than buying. Those include Seattle, New York, Kansas City and San Francisco. The other cities on the list show buying may be a more solid long-term investment.”

    http://www.prodigy-pro.com/diy/index.php?board=2.0

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  42. 42
  43. 43
    Hugh Dominic says:

    By David @ 23:

    So, I guess this means that with the $5K I got back when I took out a loan out for my $350K house last year, I’m only down $12.5K.. Woo-Hoo!!

    Not exactly. You lost about 10% of its value ($35k) on the day you bought it, because of the sellers fees that apply when you convert your house back to cash. You also lost the opportunity to invest the $350k into an asset that appreciated last year; even a safe bank CD would have netted $4k in interest income after taxes.

    You can credit yourself about $14k for the rent that you avoided paying, but deduct about $5k for maintenance, repair, and deterioration. Since you took out a loan, then you’d have to deduct the costs of financing and interest, which might be $18k in a typical case. Property taxes cost you about $5k. You can credit yourself something for the tax deductions, but not much, because at this loan level you could have deducted almost as much just by using your standard deduction.

    End of year 1, you’re down about $65k.

    What’s amazing is that even in a good market you’d be down about $45k right now. People don’t understand all the costs of a home “investment” and that even given typical appreciation it takes 5 years just to break even.

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  44. 44
    peter says:

    “Missing a major demographic here kinda like our old “George Bush truck.”

    WHAT?! Are you admitting something? How are the trucks?

    Remember, today’s GEM may be tomorrow’s over priced trash.

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  45. 45
    Jonness says:

    By Feedback @ 1:

    Imagine that, Tim: without any tax incentives, what has typically been the coldest month of the year was unexpectedly hot for buying real estate. And I don’t think we’re just talking about Chanukah gifts!

    FHA is the new subprime. 95% of all loans being made are guaranteed by the government. Rates were 4% for a 30-year fixed at the time these fools purchased their homes. The Fed is actively buying another $600 billion in bonds while holding the short term rate at 0%. Another trillion dollar fiscal policy was recently approved to dump into the economy in order to fake out GDP and trick the unsuspecting into leveraging all in on houses.

    But not to worry. The U.S. can borrow a few more trillion from China in order to keep this dog and pony show going for a couple more years. There’s nothing like robbing Peter to pay Paul; thus, stealing growth from the future for as far as the eye can see.

    This is excellent news for men who have chosen to accumulate wealth in other vehicles so that we may purchase property at a discounted price.

    Right on. My bank account is skyrocketing while foreclosure Armageddon looms on the horizon and the Fed pumps the stock market. Bernanke = Santa Clause. :)

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  46. 46
    Jonness says:

    By softwarengineer @ 8:

    Good news: if gas hits $4.50-$5 gal again, it killed demand of everything, forcing an imminent oil price collapse right after the oil price surge, IMO.

    That is good news. House prices keep falling, and my XOM keeps going up! I’m up 7% just in the month of January alone. Let the oil skyrocket while house prices fall into the sewer! If it turns the economy, I’ll pull profits. Bernanke = Santa Clause. :)

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  47. 47
    EconE says:

    - RE: Feedback @ 6

    You think I should have a Dr. check out that rash?

    RE: Ben @ 16

    We all have to be able to laugh at our fake economy. GOOOOOO CHINA!

    RE: Dirty Renter @ 19

    It was nice to meet you too! Next time however, less talk, more tongue!

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  48. 48
    Jonness says:

    By The Tim @ 13:

    As far as home prices are concerned, a double dip is no longer a possibility, it is reality.

    Apparently you are not using Ardell’s personally doctored data set. :)

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  49. 49
    Jonness says:

    By ray pepper @ 29:

    However, rolling out soon will be the new Obama truck with this picture on the sides/back stating: PAY ATTENTION WASHINGTON! ( or something like that) ..

    How about:

    “I’d lack to tap that, but first I have to finish screwing the country.”

    Rate this comment: Thumb up 0

  50. 50
    Daniel says:

    By drshort @ 35:

    RE: Daniel @ 34

    People buy and sell options/futures based on the CS index. Their aim is to describe both short AND long term home price appreciation.

    Indeed that is correct. I should have worded my post more careful. I focused on what the median of sold homes can not do.

    You have to realize I had these “discussions” with Kary already quite a few times. He has claimed all kind of weird things in the past, like calling the weighting they use for correcting heteroscedasticity arbitrary, obviously without a mathematical understanding of the method.

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  51. 51
    Pokey says:

    RE: Daniel @ 50 – Wow I totally learned a new word today.

    Rate this comment: Thumb up 0

  52. 52
    Pokey says:

    RE: Pokey @ 51 – Now to figure out a way to slip that into my next conversation…

    Rate this comment: Thumb up 0

  53. 53
    ray pepper says:

    RE: Jonness @ 49

    love it!

    Rate this comment: Thumb up 0

  54. 54

    By Daniel @ 34:

    RE: Kary L. Krismer @ 33 – Again all this proves is that you have no idea what the CS index is meant for: their goal is not to describe short term development but development “over many years”. They point out that short term discrepancies to median house prices are small but that long term discrepancies are very substantial. Anyone in the industry should really know those things.

    Apparently you aren’t aware of what I’ve said here. I’ve commented repeatedly in the past about how the size of houses has increased over the years. I’ve commented on how recently the tax credit has had an effect on the mix, affecting the median. I’ve also commented on how the C-S system has some potential for error.

    I think you’re just trying to change the subject because what I said here originally was correct, and you’ve been unable to refute it. This C-S news is news we knew a few months ago from the NWMLS release of the November data, and that that data and the C-S data are highly correlated.

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  55. 55

    By Daniel @ 50:

    You have to realize I had these “discussions” with Kary already quite a few times. He has claimed all kind of weird things in the past, like calling the weighting they use for correcting heteroscedasticity arbitrary, obviously without a mathematical understanding of the method.

    If we’ve had these discussions a lot in the past, apparently you don’t understand simple English. My position has been consistent, in the manner just explained.

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  56. 56

    By Daniel @ 17:

    Which of the two is useful for other purposes is another question. If your purpose is to estimate how big the foreclosure mess will be, CS may be more relevant (as the value of existing inventory directly influences peoples decision to default)..

    I’m going to go back to this. If you want to try determine how bad the foreclosure mess is going to be I wouldn’t look at either median or C-S. I’d look at some numbers that pertain to volumes. Number of active listings, number of solds, number of notices of default, etc.

    I understand your premise is that value might affect likelihood of default. But to suggest that C-S would do that better because it was 0.7356579 of the peak in November, while the NWMLS median was 0.7483368 off the peak is a bit absurd, to put it mildly.

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  57. 57

    RE: Yakima_Hick @ 28

    December 2010 Census Bureau Data Corrects MSM Fairy Tales

    See my Census URL Above:

    “…Sales of new single-family houses in December 2010 were at a seasonally adjusted annual rate of 329,000, according to
    estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
    This is 17.5 percent (±17.7%)* above the revised November rate of 280,000, but is 7.6 percent (±17.0%)* below the
    December 2009 estimate of 356,000…”

    Gee, we’re worse than than the horrifying bank collapse 2009 year in December 2010, and with approx 2M foreclosures in 2010; this monthly rosy report is really a joke. The recession is over….LOL

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  58. 58

    RE: pfft @ 37

    Pffft You’re Wrong About COLA’s Incorporating Food and Energy Price Surges

    Ask all the federal employees with 0% COLA. Social Security recipients 0% since 2009. That’s over half of America.

    My honest common sense URL, not your MSM fairy tales:

    “…For the second consecutive year, the Bureau of Labor Statistics (BLS) has insulted our intelligence by announcing that there is no inflation in our economy. Their lie is obvious to anyone who fills a gas tank or a grocery cart.

    The BLS omits food and energy costs from its calculation of the Consumer Price Index (CPI), although these are necessary parts of everyone’s budget. Doing this is convenient for a government wanting both to avoid paying legislated COLA increases and to hide the folly of its monetary policy….”

    http://www2.hernandotoday.com/content/2010/dec/08/081629/we-need-honesty/

    Pfft, believe everything you read, especially if it backs up your politics….LOL

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  59. 59

    RE: pfft @ 38

    Pfft, Does Debunked Mean Falling Out of Bed and Hitting Your Head So Hard

    That the MSM fairy tales sound true now? LOL

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  60. 60

    RE: softwarengineer @ 57 – First, it’s apples and oranges in that one is all sale and the other just new construction.

    Second, I wouldn’t look at new home sale data to signify much of anything, other than the health of the home construction industry. There was probably too much new inventory in 2009, and probably less but still too much in 2010. And almost all the stuff they’re selling is still from decisions made prior to 2008.

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  61. 61
    doug says:

    RE: Jonness @ 45

    You know, calling people who take out FHA’s “fools” and then implying that you’re heavily invested in the stock market (while fully aware it is being propped up) seems to be pretty foolish, IMO.

    You’re trusting your money, at least indirectly, to people like this:

    http://www.theatlantic.com/business/archive/2011/01/e-mails-show-bear-stearns-cheated-clients-out-of-billions/70128/#

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  62. 62
    Daniel says:

    By Kary L. Krismer @ 54:

    I think you’re just trying to change the subject because what I said here originally was correct, and you’ve been unable to refute it. This C-S news is news we knew a few months ago from the NWMLS release of the November data, and that that data and the C-S data are highly correlated.

    I have on multiple occasions pointed out that you do not understand why they weigh their sales pairs like they do, what CS tries to measure, why they argue that this differs significantly from above median, what CS is used for, etc.. I will not go back to get those posts as I am not registered and it is cumbersome to find the posts. That is quite frankly not worth my time.

    You say the data is highly correlated. My example above from the original research paper points out that this correlation is FAR from perfect. We talk about a difference of more than 15% within 5 years for some cities!

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  63. 63
    Daniel says:

    By Kary L. Krismer @ 55:

    If we’ve had these discussions a lot in the past, apparently you don’t understand simple English. My position has been consistent, in the manner just explained.

    Yes you have consistently insisted on misconceptions not supported by the facts.

    As a non native speaker of foreign nationality I agree my English could use improvement, after all it was my third language. However it was quite sufficient to place better than 75% of all native college applicants and good enough to finish my PhD in a field were everyone talks and writes English exclusively. Somehow this makes me doubt insufficient command of the English language is the culprit.

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  64. 64
    Daniel says:

    RE: Kary L. Krismer @ 56 – I merely provided examples. I do not insist they were particularly well suited.

    The well suited example is the one that points out historical discrepancies between CS and median data.

    On the topic of correlation again: For my first experimental physics lecture (more than ten years ago) the professor had a comparison of the number of stork sightings in a region of northern Germany and the birth rate in the same time frame. The two curves were strongly correlated. This does not imply that there is a logical connection or that they will be correlated in the future. For the CS vs median this connection exists and correlations are expected but long term data shows significant deviations.

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  65. 65

    By Daniel @ 62:

    By Kary L. Krismer @ 54:
    I think you’re just trying to change the subject because what I said here originally was correct, and you’ve been unable to refute it. This C-S news is news we knew a few months ago from the NWMLS release of the November data, and that that data and the C-S data are highly correlated.

    I have on multiple occasions pointed out that you do not understand why they weigh their sales pairs like they do, what CS tries to measure, why they argue that this differs significantly from above median, what CS is used for, etc.. I will not go back to get those posts as I am not registered and it is cumbersome to find the posts. That is quite frankly not worth my time.

    You say the data is highly correlated. My example above from the original research paper points out that this correlation is FAR from perfect. We talk about a difference of more than 15% within 5 years for some cities!

    First, I’ve understood that C-S uses paired sales data for years. To the extent you’ve told me that, it was probably you again changing the subject or otherwise being irrelevant. No need for you to find such posts. That’s not the issue.

    Second, to the extent other cities are different using NAR data, that’s irrelevant. I’m addressing the difference between NWMLS King County SFR data and C-S. In the past I’ve noted that part of the difference could be attributable to C-S using a 3 month moving average and using three counties.

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  66. 66

    By Daniel @ 64:

    On the topic of correlation again: For my first experimental physics lecture (more than ten years ago) the professor had a comparison of the number of stork sightings in a region of northern Germany and the birth rate in the same time frame. The two curves were strongly correlated. This does not imply that there is a logical connection or that they will be correlated in the future. For the CS vs median this connection exists and correlations are expected but long term data shows significant deviations.

    I would agree that they might not be well correlated in the future, and I don’t think I’ve made any claim as to how long they will be. Also, I don’t think I’ve made any claim that they were well correlated before the peak. But I would hope you would think there was at least some logical correlation between the two–much of their results come from many of the same sales!

    Also, I recall much of our disagreement in the past being more over who this data is useful to, or some of the difficulties C-S has to deal with in coming up with their number. As I’ve said in the past, C-S and NWMLS county median data isn’t useful to homeowners to value their properties, because not all properties behave in the same way. As to mix I’ve said C-S has to deal with that because their paired sales are not going to come from the same areas equally each month. Stated differently, the median isn’t the only statistic that has mix issues. Do I need to understand how exactly C-S deals with that? I don’t think so, unless perhaps every statistician that dealt with that type of issue would deal with it in exactly the same way and come up with the exact same result. Because of one or both of the issues addressed in this paragraph, I’ve said that both NWMLS county median and C-S “Seattle” are really just indicators of market strength or lack thereof.

    Again, I don’t think you’ve begun to refute the point I’ve tried to make here, which are basically that this data doesn’t really tell us anything we didn’t know roughly 45 days ago.

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  67. 67
    The Tim says:

    I don’t know about anyone else, but I’m really getting tired of the comments on every single month’s Case-Shiller post degrading into the same old argument about Case-Shiller vs. Median. Can we please drop this subject? It is incredibly un-interesting and the repetition of the same exact arguments every month is getting old.

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  68. 68

    RE: The Tim @ 67 – Great! Next month if the correlation no longer holds because C-S went down again but the median shot up in December, I’ll not say a thing! ;-)

    Seriously, I think the comparison to what we already thought from the median is valid a valid comparison, but the rest of it is a lot of non-sense. Typically getting excited about C-S numbers is like getting excited about the result of the presidential election results of the Electoral College. ;-)

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  69. 69
    Jonness says:

    By doug @ 61:

    RE: Jonness @ 45

    You know, calling people who take out FHA’s “fools” and then implying that you’re heavily invested in the stock market (while fully aware it is being propped up) seems to be pretty foolish, IMO.

    Sounds a bit like the pot calling the kettle black. With all due respect, if you’ve been sitting on the sidelines, you’ve missed an 85% runup while your cash position evaporated and your house price collapsed. I haven’t taken 100% advantage of it, but I have been quite fortunate and have made more money in the market since this nightmare/gift has occurred than ever. Meanwhile, those who leveraged all in with FHA loans have destroyed their financial futures.

    Yes, all the current bullish sentiment most likely foretells of an impending correction in the stock market. But what most people fail to realize is it’s just as easy to sell as it is to buy–especially given the ample warning that always exists at the turning points. I welcome what is occurring.

    So what is occuring? The Fed/Government is playing reverse Robin Hood. Why not take advantage?

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  70. 70
    Scotsman says:

    RE: The Tim @ 67

    Clearly the time has come for a separate Case-Shiller vs. Median thread, right next to the health care and economics threads. Make it so, Number one! ;-)

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  71. 71
    doug says:

    RE: Jonness @ 69

    Oh, I am. But mostly because my employer matches 6% on my 401k ;-)

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  72. 72
    MacroInvestor says:

    By Jonness @ 46:

    By softwarengineer @ 8:
    Good news: if gas hits $4.50-$5 gal again, it killed demand of everything, forcing an imminent oil price collapse right after the oil price surge, IMO.

    That is good news. House prices keep falling, and my XOM keeps going up! I’m up 7% just in the month of January alone. Let the oil skyrocket while house prices fall into the sewer! If it turns the economy, I’ll pull profits. Bernanke = Santa Clause. :)

    Yep, I’m with you. As soon as uncle Ben starts raising rates to pull back inflation it’ll be time to cash in the stocks. That’ll put the last bullet in real estate which will be about the time to get in.

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  73. 73
    MacroInvestor says:

    By Kary L. Krismer @ 54:

    By Daniel @ 34:
    RE: Kary L. Krismer @ 33 – Again all this proves is that you have no idea what the CS index is meant for: their goal is not to describe short term development but development “over many years”. They point out that short term discrepancies to median house prices are small but that long term discrepancies are very substantial. Anyone in the industry should really know those things.

    Apparently you aren’t aware of what I’ve said here. I’ve commented repeatedly in the past about how the size of houses has increased over the years. I’ve commented on how recently the tax credit has had an effect on the mix, affecting the median. I’ve also commented on how the C-S system has some potential for error.

    I think you’re just trying to change the subject because what I said here originally was correct, and you’ve been unable to refute it. This C-S news is news we knew a few months ago from the NWMLS release of the November data, and that that data and the C-S data are highly correlated.

    But the whole time you were essentially saying it was a great time to buy, don’t let price/investment be your only goal, while discrediting negative data points — basically variations of all the self-serving sales pitches.

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  74. 74
    doug says:

    RE: Jonness @ 69

    Also “if you’ve been sitting on the sidelines, you’ve missed so much money!” Doesn’t hold a lot of value to me after post-bubble stock market collapse. Not to mention it’s the exact same argument REA’s were using in late 2007. My 401k is slightly down overall since its inception.

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  75. 75
    MacroInvestor says:

    By Kary L. Krismer @ 68:

    RE: The Tim @ 67 – Great! Next month if the correlation no longer holds because C-S went down again but the median shot up in December, I’ll not say a thing! ;-)

    Seriously, I think the comparison to what we already thought from the median is valid a valid comparison, but the rest of it is a lot of non-sense. Typically getting excited about C-S numbers is like getting excited about the result of the presidential election results of the Electoral College. ;-)

    By the volume of ink you’ve spilled, it proves you ARE EXTREMELY EXCITED about it. Your attempt to discredit negative news is very predictable.

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  76. 76
    David Losh says:

    RE: MacroInvestor @ 72

    Case Schiller is an Index of housing prices to show trends, like oil, gold, sugar, wheat. The hope was to make a convincing argument to buy or sell based on the Index. That’s the idea that’s being presented here.

    Last year one of those yahoos, Case, or Schiller, was saying that then was a good time to buy based on interest rates, and historical affordable trends. He’s an idiot, or a confidence artist trying to build confidence.

    This is a meaningless Index that means nothing, says nothing. This is all sales data. It shows what people paid, that the time. The economy has shifted considerably since 1998. We’re on the internet. Telecommunication changed the financial markets. Banking laws changed the financial markets.

    You might as well follow oil. Oil will be a player in finance for years to come. Real Estate will go back to being the shell that commerce, business, finance is housed in.

    The only question you have when purchasing a property is what is it’s economic viability as it sits. Appreciation, like it was a $100 barrel of oil, isn’t going to happen. Wheat is a price per bushel, it’s a cheap quick transaction.

    Real Estate is not liquid. Real Estate is a higher per cent asset to any economic trends. An Index for a non liquid asset is useless.

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  77. 77

    By MacroInvestor @ 73:

    By Kary L. Krismer @ 54:
    By Daniel @ 34:
    RE: Kary L. Krismer @ 33 – Again all this proves is that you have no idea what the CS index is meant for: their goal is not to describe short term development but development “over many years”. They point out that short term discrepancies to median house prices are small but that long term discrepancies are very substantial. Anyone in the industry should really know those things.

    Apparently you aren’t aware of what I’ve said here. I’ve commented repeatedly in the past about how the size of houses has increased over the years. I’ve commented on how recently the tax credit has had an effect on the mix, affecting the median. I’ve also commented on how the C-S system has some potential for error.

    I think you’re just trying to change the subject because what I said here originally was correct, and you’ve been unable to refute it. This C-S news is news we knew a few months ago from the NWMLS release of the November data, and that that data and the C-S data are highly correlated.

    But the whole time you were essentially saying it was a great time to buy, don’t let price/investment be your only goal, while discrediting negative data points — basically variations of all the self-serving sales pitches.

    Almost total BS.

    1. I’ve never said “it’s a great time to buy.”

    2. I have said investment shouldn’t be your only goal and that your own personal circumstances can more important, and at least need to be factored in. Tim has said much the same thing.

    3. Finally I’ve not discredited any negative data points, other than to point out it’s not relevant to whether any given house has gone up or down. I’m saying we knew this data 45 days ago, and gave the specific percentage off peak for each. How is that discrediting the data?

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  78. 78

    By MacroInvestor @ 75:

    By Kary L. Krismer @ 68:
    RE: The Tim @ 67 – Great! Next month if the correlation no longer holds because C-S went down again but the median shot up in December, I’ll not say a thing! ;-)

    Seriously, I think the comparison to what we already thought from the median is valid a valid comparison, but the rest of it is a lot of non-sense. Typically getting excited about C-S numbers is like getting excited about the result of the presidential election results of the Electoral College. ;-)

    By the volume of ink you’ve spilled, it proves you ARE EXTREMELY EXCITED about it. Your attempt to discredit negative news is very predictable.

    Okay, now this is total BS, right down to the fact that there’s no ink at all! Again, pointing out we knew this 45 days earlier is not discrediting it.

    The only thing I’m excited about is correcting mis-statements of my positions.

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  79. 79

    By David Losh @ 76:

    You might as well follow oil. Oil will be a player in finance for years to come.

    The only difference is oil doesn’t have some black box index that people are willing to bet on by investing in it. Instead you just have traditional manipulation, much of which is overstated.

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  80. 80
    Jonness says:

    By doug @ 74:

    RE: Jonness @ 69

    Also “if you’ve been sitting on the sidelines, you’ve missed so much money!” Doesn’t hold a lot of value to me after post-bubble stock market collapse.

    Maybe I’m just lucky, but I’ve been able to sense the turning points. I spend about 4 hours a day analyzing the market. But I really don’t think that’s what has allowed me to flourish. In fact, sometimes I think getting too involved might be somewhat blinding. It seems to me there is a certain psychology that occurs during the turning points, and I’m pretty good at sensing it.

    I think the majority of people who got burned badly after the top were allowing others to manage their money for them. I would never ever do that. It’s the same with medicine. People think doctors are there to save them from illness. In truth, your health is your personal responsibility, and you are your own best doctor. Professional doctors are best used as health consultants on as as needed basis. Failing to heed this truth can kill you. In the same manner, failing to actively manage your own money can bankrupt you.

    I’m not rich by any means. I started life all over from scratch after spending some years on my death bed. The most difficult thing was regaining my health against all odds. Since then, I’ve kind of stepped on the gas a bit financially because I had some making up to do.

    Investing is just a game. I’ve always been pretty good at games. I have a lot of imperfections, but that’s always been a bit of a strong suit. I might as well take advantage of it.

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  81. 81

    […] and you will see that we are in a stable market. For example the second and third graphs on the SeattleBubble Website show the decline percentage from the peak in many areas of the country has stopped. In […]

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