Seattle Bubble

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.

First up is the straight graph of the index from January 2000 through July 2008.

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Price drops have resumed in all three tiers. The low tier and mid tiers have rewound to May 2006 with the high tier performing slightly better, back to “just” June 2006. The high tier took the biggest hit in July, falling over two points, or 1.3% in one month.

Here’s a chart of the year-over-year change in the index from July 2002 through July 2008.

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The low tier is still seeing the biggest drops in terms of YOY performance, falling just over 9% from July 2007. Here’s where the tiers sit YOY as of July - Low: -9.3%, Med: -8.2%, Hi: -7.7%.

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

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The high and mid tiers have fallen nearly the same amount, with the low tier resuming its drop after the flat spring “bounce.” The mid tier continues to track pretty closely with the aggregate for the whole Seattle-area market.

I guess spring wasn’t the bottom after all. At this rate, the low tier is likely to drop below 10% from peak as early as next month.

(Home Price Indices, Standard & Poor’s, 09.30.2008)

According to the latest data from the Case-Shiller Home Price Index, the home price bust in Seattle is gaining steam again.

Down 1.0% June to July.
Down 8.2% YOY.

Last year prices rose 0.20% from June to July, and year-over-year prices were up 6.9%.

Here’s the usual graph, with L.A. & San Diego offset from Seattle & Portland by 17 months. Portland continues to experience a smaller “correction” than Seattle, falling 6.6% YOY in July.

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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:

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In July, seven of the twenty Case-Shiller-tracked cities experienced smaller year-over-year drops than Seattle. Charlotte at -1.8%, Dallas at -2.5%, Denver at -4.7%, Boston at -5.4%, Portland at -6.7%, New York at -6.9%, and Cleveland at -8.1. The largest year-over-year drop was in Las Vegas, where prices plummeted just under 30% from July 2007.

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.

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It has now been exactly one year since Seattle’s Case-Shiller index peaked, and prices have declined a total of just over 8%. One year after peaking, only two other cities had declined more than Seattle has: Tampa & Miami, at 8.8% and 17.5%, respectively.

Here’s the “rewind” chart. The horizontal range is selected to go back just far enough to find the last time that Seattle’s HPI was as low as it is now. This gives us a clean visual of just how far back prices have retreated in terms of months.

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Seattle’s Case-Shiller value for July 2008 was halfway between its May and June 2006 values. So far we are “rewound” twenty-five and a half months. The June to July drop puts Seattle at yet another new post-peak low, nearly two points lower than June.

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

(Home Price Indices, Standard & Poor’s, 09.30.2008)

I thought since I’ve been on a road trip in California the last week or so, it would be appropriate to post a quick update on the San Diego / King County median price comparison I originally posted back in March.

Here’s where King and San Diego counties stand as of August:

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Back in March (February’s data), San Diego was still about 5% more expensive than King, but if our two assumptions (King prices stay flat, San Diego’s declines slow) were to have held, San Diego would have been 7% cheaper by December.

Well, neither assumption has held true. King has declined 4% in the last six months, and San Diego’s price declines have accelerated. However, since San Diego’s price drops have actually increased their pace, San Diego County is now nearly 10% cheaper than King County.

Will the Seattle area continue to command a premium over sunny, tech-heavy, defense-industry, world-class Southern California? Time will tell, but I’m predicting that this particular situation won’t last much more than a year, maybe two.

Let’s check in on the NWMLS statistics from around the sound.

Here’s where the YOY stats stand for each of the six counties as of August 2008:

King - Price: -11.2% | Listings: +16.0% | Sales: -16.1% | MOS: 6.8
Snohomish - Price: -9.4% | Listings: +2.3% | Sales: -19.4% | MOS: 8.1
Pierce - Price: -11.6% | Listings: -8.9% | Sales: -3.8% | MOS: 7.6
Kitsap - Price: -6.5% | Listings: -0.6% | Sales: -7.6% | MOS: 8.8
Thurston - Price: -7.6% | Listings: -9.9% | Sales: -6.1% | MOS: 5.9
Island - Price: -17.4% | Listings: +6.0% | Sales: -21.2% | MOS: 13.8
Skagit - Price: -9.3% | Listings: +8.1% | Sales: -41.1% | MOS:10.2

Following below are the graphs you’ve come to expect. Click below to continue reading.

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Let’s have a look at “Months of Supply” for the 30 NWMLS areas in King County. For an explanation of what months of supply means, please refer to the original neighborhood MOS breakdown post. Also, view a map of these areas here.

August MOS for King County came in at 6.80 (compared to 4.92 for August 2007 and 7.21 for September), bringing the current run to a full year (vs. the previous record of 4-5 months in the winter of 1994-1995).

In the graphs below, you’re looking at the MOS for the “Res Only” data from the NWMLS King County Breakout pdfs for the one-year period of September 2007 through August 2008. The bar graph is centered vertically on 6.0 MOS, so that it is easier to visually tell the difference between a seller’s and buyer’s market (i.e. - shorter bars mean a more balanced market). Each graph again has the same scale on the vertical axis and has the King County aggregate figure plotted in red on the far right, so they can be easily compared.

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As a follow-up to last Friday’s foreclosure news, let’s take a look at a couple charts of local foreclosures.

I contacted the folks at RealtyTrac to request historical foreclosure data for the Seattle area, and they were kind enough to provide me with their foreclosure data for King + Snohomish counties going back to April 2005. Here’s a long-term chart:

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You can see that since July’s data showing 1,030 homes in some state of foreclosure (Default, Auction, or REO), we have been in uncharted post-2005 territory. August’s 1,185 foreclosures pushed even further into record highs.

Here’s a chart comparing the foreclosures for each month:

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We had a couple big spikes in November and December last year, then early this year things seemed to settle down close to 06-07 levels. But since June foreclosures have been noticeably shooting up.

Now that I’ve got this historical data as a basis, these will probably enter the rotation of graphs that are updated monthly.