Case-Shiller Tiers: Price Gains Slow in Low & Middle Tiers

Case-Shiller Tiers: Price Gains Slow in Low & Middle Tiers

Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

  • Low Tier: < $275,217 (up 1.3%)
  • Mid Tier: $275,217 – $443,041
  • Hi Tier: > $443,041 (up 1.6%)

First up is the straight graph of the index from January 2000 through April 2014.

Case-Shiller Tiered Index - Seattle

Here’s a zoom-in, showing just the last year:

Case-Shiller Tiered Index - Seattle

The low and middle tiers saw growth slow dramatically compared to a month earlier, but the high tier sped up, pulling the overall index with it. Between March and April, the low tier increased 1.3%, the middle tier rose 1.4%, and the high tier gained 2.7%.

Here’s a chart of the year-over-year change in the index from January 2003 through April 2014.

Case-Shiller HPI - YOY Change in Seattle Tiers

Year-over-year changes slipped further for the low and middle tiers, but increased for the high tier. Here’s where the tiers sit YOY as of April – Low: +16.6%, Med: +10.2%, Hi: +11.1%.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Case-Shiller: Decline from Peak - Seattle Tiers

Current standing is 24.3% off peak for the low tier, 16.2% off peak for the middle tier, and 10.0% off peak for the high tier.

(Home Price Indices, Standard & Poor’s, 06.24.2014)

  

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.

21 comments:

  1. 1
    Erik says:

    This is good news for us low tier people that are looking to buy. I was concerned even us low tier people would get priced out and be forced into apartments permanently.

    Jay: I would like to be able to tell you a good answer, but I only know what people on here tell me. Ardell just implied that jobs may be sticking around for a while on the east side. That is a good thing. You don’t want to be left with a place when all the programmers leave. It seems like there is likely 2 years of steady jobs on the east side. That is a good thing. Looking at the united states in general, I don’t think we are going to dip back in a recession, but I am probably the least knowledgeable on here about that stuff. Housing prices are only loosely correlated with interest rates as Tim has shown on this site. There have been times when interest rates and housing prices both head up.

    The 2 people that I think predict the future the best is #1, Corndogs(a previous commenter). Corndogs thought the territory that we are in now will pace with inflation. He thinks that when this big spike is over, prices will still increase, but only at a slow rate. #2, The tim hates to be wrong. The tim also made a similar statement about housing prices inching up slowly for a longtime after this run up.

    What does this mean for you and I? It means that we need to do better remodel jobs for cheaper. We need to get better purchase prices. The time of double digit housing price increases is most likely over. Plan on 3%. I have been trying to get a good deal myself. Keep putting in low offers, you will eventually get a taker. Your number of successes is directly related to your number of attempts. Who cares if they say no.

    Good deals seem far and few between these days. Even at the auction, everything is selling high. I think I will just buy one and hunker down for a couple years, remodel it and try to make $40k profit or so. $40k is better than the $0k I would get from renting.

    I don’t know what is up with West Seattle, but those places seem pretty cheap. Buy there and hope prices go up maybe? I think they will go up eventually.

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  2. 2

    RE: Erik @ 1

    Some Good Thoughts Erik

    I too refuse to predict the future with any accuracy too. Hades, even the MSM admits most of the “savvy” investers missed the doubling of the stock market dividends since 2008. If our investment advisors can’t get it right, who can? I see now, after the fact, they’re recommending all stocks with no bonds/CDs waterring it down. Too bad most of the big investment firms sent their clients on deadends and losses from 2008 on. But give ‘em some slack too, who would have known.

    I talked to my neighbor yesterday over the fence, she’s a realtor, and she told me the $100-125K units are in high demand today; including where I live. She told me I could sell anytime I wanted, because the qualified demand is all mainly lumped in this price range now. She sounds like a honest savvy realtor in my book. I told her I bought below what I qualified for, because I predicted as overpopulation [call it over-growth if that term bugs you] reduces wages in a stagnant labor pool; the low end properties will be the only ones selling. She totally agrees with me now.

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  3. 3
    JWS says:

    RE: softwarengineer @ 2

    Many Millennials in and around Seattle are doing just fine.
    More than 3,000 are here for summer internships and many will return with permanent jobs.

    http://seattletimes.com/html/localnews/2023920010_internhousingperksxml.html

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  4. 4

    RE: JWS @ 3

    What the MSM Article Didn’t Say

    The interns work for nothing, that will help pay off their student loans….LOL

    In my day there was no such thing as an intern, you were a “new hire” with a paycheck and medical benefits. Another followup to this news article, how many will actually get jobs and benefits? 1%?

    Nah, you’re better off flipping burgers with a college degree and getting job experience….this is just another form of youth slavery…these folks will be back in their parents’ basement in no time. At least I got my Millenial out of the house and if she needs help later [much later, she has a good bank account and no student loan] I can swing the $600/mo to rent a 3 bdrm home in Kansas City and keep my private Seattle area man cave to myself ;-)

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  5. 5
    JWS says:

    RE: softwarengineer @ 4

    You should read the article.

    It gives specific examples of the intern salaries – $6,000/month as one example and $7,000/month in another.

    And most are asked backed for permanent jobs. Here’s what the article says about Microsoft:

    “At Microsoft, Dowling said, the majority of interns are given the opportunity to receive an offer at the end of their 12-week internship”

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  6. 6
    boater says:

    RE: softwarengineer @ 4
    You clearly don’t no anything about the tech world and their internships. Just like the large accounting firms, internships are well paid and intended to be hiring paths for the tech giants.
    If you are working on a CS degree and can’t find someone to pay you well for the summer you’ve done something seriously wrong. Here’s a suggestion. Get out of your man cave and enter the real world. Since this is the Seattle bubble enter Seattle specifically. It looks drastically different than the picture you keep painting. Millennials have jobs. Decent jobs. Restaurant servers in Seattle fight the $15/hr minimum wage because they fear it would lower the incentive to tip and lower their actual take home pay which is higher than $15/hr by quite a bit. What the article says about Microsoft is just as true for Amazon, Google, Facebook, etc. If you can get the talent before they event leave college you’ve saved a lot of work and money. Seattle is expensive because money is flowing through it in large doses.

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  7. 7

    RE: JWS @ 5

    Re-Read the Article Again

    The $7000/mo job offer to ONE intern was for one lucky devil lotterry winner at Amazon. The MSFT deal is $2500 housing stipend [is it taxed?] over the summer…..a $550 studio [gas and car and food?] leaves these poor folks with $300/mo pay with no benefits…..nope, flip burgers.

    Perhaps there’s a guilt trip thing here….I met 8 interns at Toastmasters, they were very bright, but almost all of them weren’t at the 2nd Speechcraft meeting…..couldn’t afford the gas? The laid off 50 YO engineer seemed embarrassed trying to teach Speechcraft too, on unemployment.

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  8. 8

    RE: boater @ 6

    $15/hr Waiting Tables and $50K in Student Debt With $2200/mo for a One Bedroom With No Parking Near Amazon?

    Sounds like suicide in Seattle’s high rent…..how do you eat? How do you drive a car? The Tooth Fairy brings you more money? How do you deal with the depression?

    Nope, I’ll stay in my Man Cave and smile.

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  9. 9

    RE: boater @ 6

    A Bright Spot

    Marijuana jobs added this year and yes…..I see restaurants and hotels hiring for this boost in tourism. It may last a year or two, but I predict they’ll all get jealous and the whole country will legalize pot very soon….then the party’s over. Drink up while ya can ;-)

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  10. 10
    JWS says:

    RE: softwarengineer @ 7

    You may want to read it again. The $7000/month salary is for the Microsoft intern (not Amazon). The Amazon example is $6000/month.

    And if you honestly think Amazon only pays one intern I am speechless.

    Additionally, the Microsoft $2500 stipend is for HOUSING (for those that don’t want to live in corporate housing). They also get paid a salary. The article clearly states that the Microsoft program manager intern makes $7000/month.

    Rate this comment: Thumb up 0

  11. 11
    SG says:

    RE: JWS @ 10

    Actually read an article and comprehend F-A-C-T-S??? That’s too much to expect from @softwareengineer. Everyone on this blog has learned to just ignore his constant blabbering based on cherry picked facts from publications that suit him. I am sure he will respond to my comment with a link from an obscure site.

    As a software engineer myself, I know how good the current job market is for software engineers. And as a hiring manager myself, I know how we have to compete with other companies fighting over the same talent pool. Either he is not actually a software engineer and claims to be one to impress the women or a terrible one that cannot get hired anywhere as even a semi-decent one can find a job pretty easily to afford a place in the city.

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  12. 12
    Erik says:

    RE: SG @ 11
    I like Softwarengineer. He adds good ideas here sometimes and I like to read what he has to say. Everyone has something to contribute. Maybe you and him just aren’t on the same wavelength? That doesn’t make him an idiot.

    Do these software places hire mechanical engineers? If so, what could a mechanical engineer do at a software company?

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  13. 13
    JWS says:

    RE: SG @ 11

    Thanks for the notice, I won’t waste my time in the future. I’ve seen @softwarengineer comment many times about Millennials and wanted to show that many of them in the Seattle area are doing well.

    Oh well, I tried.

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  14. 14
    Erik says:

    RE: softwarengineer @ 9
    If other states legalize pot, we need to up the ante. We could legalize crack.. Think of the revenue that could bring in. People would keep spending money until they are buried. Look at North Everett. People steal other people’s money there to buy crack or meth. My point is, the money keeps changing hands keeping the economy going. I got my lawn mower stolen twice, many tools stolen, and my truck broken into 5 times during my 6 year sentence in north everett. I am sure it was drug related since I would see those people lurking in they alley “looking for aluminum to recycle.” They were totally staking out houses to rob, and they did.

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  15. 15
    Jay says:

    RE: Erik @ 12 – Yes! Have you heard of Program Manager? Basically it is a non coding job, and you just have to do the talking and convince people that your IDEAS are great. I think you can do it! You have been trying to convince people that you sold your condo at the perfect time, right?

    You should try applying for a PM job at Microsoft, Google and Amazon. With your experiences and degrees, you can probably get paid at $120,000, depends on the company. Amazon pays the least. I think Microsoft’s Surface and Xbox do hire mechanical engineers. Surface is so popular, try to look up jobs in that group. At Microsoft, PMs actually get promoted faster than developers because there is less competition! You love remodeling and sound very creative, you might as well try a PM position. The interviews for PMs are quite strange. If you do get an interview for a PM job, find interview questions online, so you will be ready for it. I never worked as a PM, so that’s all I can tell you.

    Now, update your resume, go and submit it!

    I am going to work on my start up idea seriously soon! The monetary reward and personal satisfaction are much more significant to me than just a job. But some people love having a job, because it is very stable and you don’t have to sell your ideas to get investors or grant. But I love that kind of challenge and risks. I thrive more in a high risk situation than a mundane career! The problem is that I have too many ideas, so I just need to DECIDE on a set of features, and implement them.

    Best of luck!

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  16. 16
    wreckingbull says:

    RE: Jay @ 15 – Some of the most important traits of a program or product manager are diplomacy, maturity, and patience. Enough said.

    Rate this comment: Thumb up 0

  17. 17
    Erik says:

    RE: wreckingbull @ 16
    Did you retire yet?

    Rate this comment: Thumb up 0

  18. 18
    Erik says:

    RE: wreckingbull @ 16
    I have been super patient with you because I read between the lines from other commenters and I determined you have a learning disability or anger issues. I allow you to comment on here freely. Don’t push it.

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  19. 19
    Siddharta says:

    RE: SG @ 11

    Agree with SG. As a hiring manager also at a small 20 person startup, it is extremely hard to hire engineering talent in the seattle area. Almost impossible to match the compensation and benefits of larger companies in the area.

    Rate this comment: Thumb up 0

  20. 20
    SaffyThePook says:

    By Erik @ 18:

    RE: wreckingbull @ 16
    I have been super patient with you because I read between the lines from other commenters and I determined you have a learning disability or anger issues. I allow you to comment on here freely. Don’t push it.

    I didn’t realize that Erik was a moderator of the site and/or The Tim’s alter ego.

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  21. 21
    ongsomwang says:

    Softwareengineer is right too some degree.

    Sure some millinneals are doing great in the Seattle area. I am one of them (professonal making six figures). The problem is that the VAST majority of millineals today are doing terrible.

    Many of my peers in the 25-35 range are renting, paying huge loans, and work in fairly low paying jobs for their skillset. Many of my peers who are professionals (physicians, lawyers, pharmacist, etc.) will tell you that student loan debt is killing them. Many outside of the professional degrees can’t even find good paying jobs.

    Sure many software engineers are doing well. But most college graduates are NOT engineers.

    And as far as the economy of this country is concerned. It is obvious that we are in a huge bubble with regards to stocks. The fed policy of ZIRP, and QE has inflated asset prices beyond belief. The true of the matter is that we never really left the recession. Sure the rich have gotten richer, but the poor have gotten a heck of a lot poorer.

    Fact is: 1) Plenty of people dropped out of the workforce 2) Millineals are saddeled with record debt 3) Many millineals rent, because housing is darn expensive 4) Fed Policy has created multiple bubbles.

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