Case-Shiller Tiers: Prices In All Tiers Skyrocket in 2017

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: < $350,258 (up 2.0%)
  • Mid Tier: $350,258 – $562,455
  • Hi Tier: > $562,455 (up 2.4%)

First up is the straight graph of the index from January 2000 through April 2017.

Case-Shiller Tiered Index - Seattle

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

Case-Shiller Tiered Index - Seattle

All three tiers have basically been skyrocketing month-over-month since January. Not a great sign for anyone hoping for a slowdown this year.

Between March and April, the low tier increased 2.3 percent, the middle tier rose 2.8 percent, and the high tier was up 2.5 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through April 2017.

Case-Shiller HPI - YOY Change in Seattle Tiers

Year-over-year price growth in April hit a three-year high in the low and middle tiers, and the highest point since October 2006 in the high tier. Here’s where the tiers sit YOY as of April – Low: +13.5 percent, Med: +12.8 percent, Hi: +12.6 percent.

Lastly, here’s a decline-from-peak graph like the one posted earlier this week for the various Case-Shiller markets, but looking only at the Seattle tiers. All three tiers are now above their previous peak levels.

Case-Shiller: Decline from Peak - Seattle Tiers

Current standing is 5.5 percent above the 2007 peak for the low tier, 12.8 percent above the 2007 peak for the middle tier, and 19.5 percent above the 2007 peak for the high tier.

(Home Price Indices, Standard & Poor’s, 2017-06-27)


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.

11 comments:

  1. 1

    Desirable Location

    Props Seattle home prices up….especially when buyers aren’t generally employed and are immune from using the crowded/jammed infrastructures, anyway.

    Keep packing new homes in cul-de-sac s using the same jammed freeway accesses and wallah… commute times just got much longer…but a lions share of us buyers are laughing anyway, we don’t drive the freeways during rush hours. Take the trains? Pull out your billfolds….

  2. 2
    Doug says:

    RE: softwarengineer @ 1 – I don’t understand what you’re trying to say most of the time, but I like it!

  3. 3
    Jon says:

    Seattle prices lag behind California prices. We are just catching up to their big increase in 2013-2014.

  4. 4
    David B. says:

    I can’t imagine this being a good idea:
    http://www.sfgate.com/realestate/article/Redfin-data-shows-more-homebuyers-making-offers-11256421.php

    I haven’t so much as rented a home without physically inspecting it first. I couldn’t fathom buying one sight unseen.

  5. 5

    RE: David B. @ 4 – I saw that and really suspected the data as being questionable. I could see maybe one spouse not seeing the property, but none of them would be highly unusual.

    It is though something RE listing agents look out for. The chance of a party backing out on inspection if they haven’t even seen the property is rather high.

    Also, the data does show Seattle being generally lower than other cities, and if that is to be believed I would attribute it to agents checking, perhaps our inspection contingency being subjective (creating the risk I mentioned above), and possible Seattle having a high percentage of listings with open houses.

  6. 6
    Doug says:

    RE: David B. @ 4 – I bought my first house in Seattle sight unseen from California in 2014.

    I also waived the inspection, set my earnest money at 14.5% of the purchase price, and 100% non-refundable (this was custom language).

    Definitely was risky, but it was a calculated risk and it turned out ok. I ended up making 30% in 2.5 years (with no upgrades to the house) and traded up.

    For me, the decision was justified by the fact that this was going to be my forever home. While I did end up moving, I never looked at it as an investment and certainly not a spec play.

    Home buyers today need to have the same mentality if prices are preventing you from pulling the trigger.

  7. 7
    redmondjp says:

    Lots of offshore buyers purchase houses using only a local agent who emails pictures to them. I recently bought a riding lawn mower from a seller in Sammamish who had this happen – the agent went through the house taking pictures, and the offer came in later that same day.

  8. 8

    RE: redmondjp @ 7 – Undoubtedly it happens. I’ve seen a sale happen once and a rental happen once. But not at the percentages indicated in the survey.

    On this topic, here’s another survey, which indicates absurd results.

    https://www.extremetech.com/computing/251869-survey-claims-25-windows-users-will-switch-mac-within-six-months

    Or you could also add in any survey which indicates that the cost of labor is completely inelastic (the minimum wage studies which are not the recent UW study).

  9. 9
    Duplex says:

    We bought our house site unseen. We did a video tour w/our agent and waived all contingencies, so there was no option to back out. We were temporarily living out of state and with the limited inventory, there was no way we could manage flying to seattle every weekend to visit potential houses. It’s perhaps not for everyone but we’d been looking to buy for four years, had toured hundreds of houses (and made a dozen offers) during that time span. We also knew the neighborhood well, having lived there in a rental previously. Our agent told us that we were hardly the first buyer to do it this way and that it’s increasingly common for out of state buyers.RE: David B. @ 4

  10. 10
    Brimley Chen says:

    We are from Toronto, Canada. I bot the house last year with the agent from Refin. I didn’t go to visit the house before we bot it. However, we did hire home inspector and did the sewage scoping. We are very satisfied with the purchase. In fact, we are lucky when we have so much information online and even the detail information in King County Website (title deed, easement contract etc). Your system is very transparent! In canada, we need to pay a lawyer for all the these. I believe the houses in Seattle are still undervalue, in comparison with prices here in Toronto and Vancouver.

  11. 11
    Build More Cities says:

    On Grand Ridge up off Highpoint Way off the 90 where Gigabit Fiber was installed by CenturyLink just recently, a community of about 75 homes without a stoplight to the highway — home prices shot up 16-18% in less than 6 months.

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