Case-Shiller: Seattle Prices Rewound to Summer ’06

Winter for Seattle home prices continued in February according to the latest data from the Case-Shiller Home Price Index.

Down 1.0% January to February.
Down 2.7% YOY.

The only people surprised by this data are the real estate agents that really believed it in 2006-2007 when they told people that it was “a great time to buy.” Home prices in Seattle have now declined a total of 6.5% from their July 2007 peak, and have retreated to roughly where they were in July 2006.

Here’s the usual graph, with L.A. & San Diego offset from Seattle & Portland by 17 months. Seattle’s YOY drop continues to beat Portland, which saw a 2.0% drop in February.

Case-Shiller HPI: West Coast
Click to enlarge

And here’s the graph of all twenty Case-Shiller-tracked cities:

Case-Shiller HPI: All Cities
Click to enlarge

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
Click to enlarge

Hey, we improved slightly from Miami’s crash course. Phew!

And just to help us visualize the drops better, I’m introducing a new chart this month. In this one, I’ll adjust the horizontal axis 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.

Case-Shiller HPI: Seattle Price Reversion
Click to enlarge

So far, we’ve turned the dial back a total of 19 months, to July 2006. Looking at that another way, in the 7 months since Seattle’s peak prices, 12 months of price gains have been wiped out.

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

(Home Price Indices, Standard & Poor’s, 04.29.2008)

Update: Here are the links to coverage at the Seattle Times and Seattle P-I.

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    david losh says:

    I think it was this web site that showed a graph of straight line appreciation over the past ten or twenty years. I seem to recall 2005 as the point where home prices bgan a spike.

    My own recollection is that in 2005 prices went crazy so I would expect pricing to return to those levels with a slight boost from a more moderate appreciation.

  2. 2
    Ubersalad says:

    was david losh added to counter balance the intelligence level of this blog?

  3. 3
    patient says:

    As wild as it sounds it seems like Seattle’s current yearly depreciation pace of 12% is low in comparison. It looks like LA and SF curently have a yearly depriciation pace of about 60%! It also looks like when you have passed about 10% off preak you start free falling. Thanks for the new graph The Tim I like it.

  4. 4
    Ben says:

    Ouch, ubersalad. You’re not reduced to calling people dummies, are you?

    The median price appreciation from early 2005 to July 2006 was about 24%. If we reduce that figure by 9% (moderate appreciation over three years), it sounds to me like David is predicting an additional 15% drop from where we are today. A little over 20% off the July ’07 peak.

    From what I’ve seen that’s close to the average prediction made by readers of this blog. So, I’m not sure why you’re insulting his intelligence, even if you think the drop is going to be higher than that (which I do).

    BTW David, I won’t jump to a snap judgment about your intelligence (or lack of it), but I will comment on your website…

    Yuck! Hire a professional, will you? You wouldn’t hire one of us yahoos to close a sale or inspect a property, so why’d you let your ten year old nephew build you a website?

  5. 5
    patient says:

    Correction it is SF and LV that drops at 60% yearly rate. LA only moves at about 54% yearly depreciation rate…

  6. 6
    rose-colored-coolaid says:

    patient, the free-fall you reference seems more closely related to when the credit markets tanked. I’m not attempting to discredit your analysis that 10% declines might be psychologically important. I only want to point out that markets are complex and its difficult to pick on a single facet to describe the market’s action.

  7. 7
    Ben says:


    You’re right of course, for all the hype you hear about psychology/hysteria having so much effect on markets (both upward and downward), the reality is clear that the MOST important external force in real estate (other than simple supply and demand) is the availability and price of credit.

    Thats why people who say there is not nation real estate market are wrong, because there is a national credit market (and an international market), and it is a very major driver for local real estate valuations.

  8. 8
    patient says:

    I agree rcc and it was not much of an analyzes just a technical observation without looking at underlying fundamentals. The ~60% yearly depreciation rate in some cities are however truly astonishing. If it keeps up you would almost guess these cities will bottom out later this year. Heck, even I will be tempted to pickup a shack in SF 60% off today’s prices…

  9. 9
    patient says:

    If you look at fundamenta though it’s not as easy as to say when financing got tigther. I also think at about 10% drop off peak these markets where ripe for a spike in foreclosures. Most of them where slower than Seattle in the beginning of the downfall and thereby allowed some more time for defaults to build.

  10. 10
    magnolia44 says:

    add another 15% decline and many of you still can’t or won’t buy. New lending standards and tighter credit are here to stay. For people like me in the 800 fico. wise you will still need the large down. So for those of you cheering it will be nice to see if you are in a home in a few years. Is there a bubble yes I am ok so no sour grapes here since we got a great deal and last of the good financing deals which are no longer available. For many youwont have the 80k to put down on the 500k home that may end up at 400k if it when gets to that. Good luck

  11. 11
    NostraDamnUs says:

    Damn… I guess there won’t be any 50-75% declines in this area… and I was looking for a steal…

  12. 12
    patient says:

    Give it some time Nostra. All of the markets that are now seeing 60% yearly depreciation rate started in a slower pace than Seattle. The people who has been saying “50% off, It won’t happen” might very well have to eat their words.

  13. 13
    vboring says:

    50% off citywide would be a pain and seems quite unlikely to happen.

    individual neighborhoods, especially in pierce & snohomish counties, could see 50% off, though

    individual houses almost certainly will see drops in this range, though this may be due to the negative value added by disgruntled homedebtors being kicked out.

  14. 14

    “All of the markets that are now seeing 60% yearly depreciation rate “….
    I won’t dispute that some areas may have seen a 60% total decline since peaking, but I don’t think any place has seen a 60% YOY decline, or even close to it.
    Am I wrong?

  15. 15
    deejayoh says:

    add another 15% decline and many of you still can’t or won’t buy. New lending standards and tighter credit are here to stay. For people like me in the 800 fico. wise you will still need the large down. So for those of you cheering it will be nice to see if you are in a home in a few years. Is there a bubble yes I am ok so no sour grapes here since we got a great deal and last of the good financing deals which are no longer available. For many youwont have the 80k to put down on the 500k home that may end up at 400k if it when gets to that. Good luck

    Oh how I love these “I can never be wrong” kinds of posts. They inevitably come from either someone who bought in the last year (AKA “The Top”) or someone who stands to make a commission from your purchase now (AKA “a REALTOR®”)

    So as I am sitting here with money I made off one of your top-buying brethren sitting in the bank, waiting to be an even larger percentage down payment – I just have to laugh.

    “the last of the good financing deals” LOL.

  16. 16
    patient says:

    Ira, I don’t think any market have seen 60% decline yet however the depreciation rate in SF and LV are currently 60% on a yearly basis. The month to month drop was about 5% multiple that with 12 and you get a yearly depreciation rate of 60%.

  17. 17
    The Tim says:

    No city is at 60% annualized yet. You can’t just multiply the month-to-month decline by 12, because 5% off 100 is 95, but 5% off 95 is not 90, but 90.25, 5% off that is 85.74, etc. 60% annualized would be a decline of about 8% month-to-month. The largest drop in this latest data set was a 5% drop in San Francisco (hey, I thought they were immune too).

    Here’s the annualized rates of depreciation for all the Case-Shiller-tracked cities based on their January-February declines:

    Phoenix – AZ: 39.3%
    Los Angeles: 40.8%
    San Diego: 35.6%
    San Francisco: 46.3%
    Denver: 12.9%
    Washington: 28.1%
    Miami: 30.2%
    Tampa – FL: 31.5%
    Atlanta – GA: 11.2%
    Chicago: 21.6%
    Boston: 15.6%
    Detroit – MI: 26.7%
    Minneapolis – MN: 34.5%
    Charlotte – NC: 4.3%
    Las Vegas: 44.4%
    New York: 11.5%
    Cleveland – OH: 17.0%
    Portland – OR: 15.9%
    Dallas – TX: 8.2%
    Seattle – WA: 11.1%
    Composite-10: 28.8%
    Composite-20: 27.2%

    Not that I think this information is particularly meaningful, but there you go.

    [Edited to correct above figures. Original comment showed 11 months instead of 12.]

  18. 18
    b says:

    magnolia –

    That theory only works if people never actually have to sell their real estate and can hold it for an infinite amount of time before finding a buyer. Since that is certainly not true, a rational market dictates that the tightening of credit and higher interest rates will simply push prices down that much further. This is a big reason why I think the 20-30% declines people predict will end up being much more. While that will return us back to 2005 price levels it does not correct for the new credit environment that is much different from 2005.

    As you point out, not many people have the $80k saved up for that $400k home that used to be $500k. All that means is the $500k home will not end up at $400k, it will have to continue to drop until it can find a buyer.

  19. 19
    Jason Q says:

    I have been following which is a blog that tracks San Francisco in a somewhat bearish (realist?) manner.

    Their big debate right now is that a county tracked by the MSA should not be included. Last year it was that San Francisco is the best market in the world so it would not be effected like other markets.I guess EVERYONE thinks some specific piece will be immune. The next thing I am waiting for is that the penthouse of the Ritz in downtown SF will not be effected. I guess that last part might be true though depending on how many billionaires out there value it.

  20. 20
    alex says:

    I don’t like where this is going… 1% jan-to-feb is less than I expected. We may end up having a spring bounce after all (however weak).

  21. 21
    magnolia44 says:

    so now the 500k home will be sub 4’s Ifthat happens I will fold up the tents and bow down. I am just pointing out my perception, I did not buy at the top and really can’t be lumped on with most since we bought a family home at about 100k below June 07 estimates so please don’t think I am bitter, we have a ways to go before I an in the red and even then I am here for the long haul. Thanks for the concern.

  22. 22
    magnolia44 says:

    ps part of the 100k savings was by buying past June so we benefited quite well from the drop from late in 07

  23. 23
    Joel says:

    Magnolia only exists to constantly remind us that his recent purchase was a good decision and that even if house prices drop precipitously we’ll all still be priced out of the market because of the lack of “good” financing deals.

  24. 24
    biliruben says:

    Magnolia is here to answer the question whenever we ask “who the heck is BUYING in THIS market?!?!” ;)

    Just kiddin’, Maggie. Another 15%, and I’ll be joining you on the continued slide down.

    As soon as that 500K house last summer in 400K, I’ll grab it and ride it down to 300K with you. Houses are nice to have, even if they’re a rotten investment.

  25. 25
    magnolia44 says:

    LOL alrighty I see the point I will go back to lurk mode like I did for the last few weeks. Good luck guys and gals.

  26. 26
    goin' for it says:

    Back to 2005 levels “with a slight boost from a more moderate appreciation.”??

    Man, thanks, I was having a boring day till you put that one out there. Btw, you owe me a new keyboard. ;)

    Seriously, how is there supposed to be appreciation when the nation is headed into the biggest recession since 1930? Appreciation is tough to find when people can’t FIND JOBS. Also, have we all conveniently forgotten about the subprime that will hit NEXT year in addition to the Alt-A’s?

    Lets not forget the fundamentals here people.

  27. 27
    deejayoh says:

    I am reminded of a certain poster who constantly reminded us all what a great deal he’d gotten by purchasing in April 2005 in Ballard. His beloved zestimate now sits at $50k off its peak, down ~10% – cutting off almost half of his paper gains in the last 12 months.

  28. 28
    patient says:

    Just to show that I dide not intentionally try to inflate the depreciation rate I used the case shiller index directly:

    SF March: 183.81
    SF April: 174.54

    174.54 is 94.96% of 183.31. A 5% monthly depreciation rate is 60% a yearly rate.

    The number for LV:

    March: 186.05
    Aprill: 177.18

    monthly rate: -4.76%
    yearly rate: -57.12%

  29. 29
    The Tim says:

    A 5% monthly depreciation rate is 60% a yearly rate.

    What I was trying to point out is that 5% month-to-month does not translate to 60% year-over-year. Consider the following series of numbers, each 5% less than the previous:

    0: 100.0
    1: 95.0
    2: 90.3
    3: 85.7
    4: 81.5
    5: 77.4
    6: 73.5
    7: 69.8
    8: 66.3
    9: 63.0
    10: 59.9
    11: 56.9
    12: 54.0

    At the end of 12 months, the final number is 46.0% lower than the starting point, not 60% lower.

  30. 30
    hzg says:

    no, a 5% monthly depreciation is a 54% annual depreciation

    .95 raised to the 12th power is .54

    I ask you, with your method of calculation what do you have after 20 months?

  31. 31
    hzg says:

    Oh, same point, point Tim, I believe you did a 11 month depreciation

  32. 32
    patient says:

    Thanks for explaining The Tim. As I said it was not my intention to mislead. Accelaration is a bit tricky to scale in percentage numbers so i just made it easy, thanks for correcting.

  33. 33
    patient says:

    Mathematics aside I think 54% or even 43.1% are pretty staggering depreciation rates for a former “immune area”.

  34. 34
    The Tim says:

    Oh, same point, point Tim, I believe you did a 11 month depreciation
    Whoops, you’re right about that. But you left out one step on your explanation. 0.54 is the total value after 12 months, not the depreciation. The depreciation is 1-0.54, so 46%.

    I went back and corrected my above comment to reflect a full 12 months of decreasing values.

  35. 35
    patient says:

    This one reason why this site is so cool. Data is challenged until it’s get right even if it takes 3 people(so far) being initially wrong to get there…

  36. 36
    yeslerhill says:

    It may have been mentioned above, I read a lot of the comments (which are almost always interesting on this blog), but I did not see it:

    I a, assuming homeowners in Seattle with their massive valuations, have used some of their home ownership to get lines of consumer credit, like the rest of the country has? I think that will be the real kick in the pants for the nouveau riche in Seattle. Suddenly they’ll be more nouveau débiteur!

    And I think the Clise’s recent rtaking their chunk of the Regrade off the mareket for development is the toe of the other shoe falling; commercial real estate in the Puget Sound region.

    I’m a life long renter, I just want rents to come back into my range. And I see more and more condos/apartments going up, so I’m hopeful. I’m also looking forward to the yard/rummage/fire sales!

  37. 37
    Everett_Tom says:


    Funny you should mention that, check out this article
    Seattle-Tacoma in top 20 for worst homeowner debt

    as seen on the “Open House” Real Estate Blog for the news Tribune.

  38. 38
    Ubersalad says:

    I guess it’s better that david losh is spending more time on this site, which means he’s spending less time in real life to “educate” those that are less intelligent.

  39. 39
    wreckingbull says:

    Hey Tim,

    I think the ‘decline from peak’ graph is truly one of the best you have come up with. It is simple, yet tells the story. Whenever I show that to my ‘Seattle is spesh’ friends they pretty much shutup. Makes me glad I sold in ’06.

    Good work.

  40. 40
    JohnDoe says:

    Do you think that house is a steal in Kirkland market? That is what my agent keep saying to me.. I still couldn’t convince myself. It dropped from $1,089mil to its current value. Problem is there is a low income apartment complex right in front of it and zero yard. If what you all telling is correct, I should wait a bit more I guess.

  41. 41
    redmondjp says:


    The question isn’t really if it’s a ‘steal’ or not, but rather the more important one: can you afford it (and to a lesser extent, will it bother you if its value drops after you buy it)?

    Taken from the Redfin listing, I must mention my favorite feature of the house: ‘High Tech Cabling’

    And also it lists the annual taxes at $1,450.00 — obviously this is a gross error. It might be last year’s taxes on the bare lot before the house was built

  42. 42
    wreckingbull says:

    John Doe,

    I once made the mistake of buying next to multi-family rentals. It was a mistake I only made once. If you really want to part with that kind of scratch, get the hell away from the rentals and in a nice single family neighborhood.

    Seriously, bubble or not, please don’t do it. You will regret it.

  43. 43
    Eleua says:


    Next thing you know, some whack-o is going to come in here and start posting that a decent chunk of higher-end properties in the PNW are going to start selling for 20c on the dollar.

  44. 44
    Thaxter says:

    I did a sort of crummy thing today and looked up the zillow estimate of the house my friends bought last year. I told them numerous times it would be better to wait, that they were buying at the top of the bubble. Did they listen? Of course not. They bought this house in the 98122 zip code area for $480k. It is now valued at $459K.

    They haven’t been very friendly to me lately. Maybe I should have kept my mouth shut and not said anything.

  45. 45
    Herman says:

    The thing to consider about treating your home as an investment is that it costs about 10% of its value to sell, when including commissions, taxes, and fees. So the moment you buy it, you effectively have lost 10% of your home’s value. That is a huge exit load.

    Back when I bought in 1997, during normal times, the rule of thumb that it takes 5 years to recover from that loss under normal appreciation, inflation, and maintenance.

  46. 46
    BK Attorney says:

    A decent chunk of higher-end properties in the PNW are going to start selling for 20c on the dollar.

  47. 47
    crystalball says:

    The chart at the following link shows my predictions for the continued deflation in Seattle CSI through the next 12 months:

    I made this chart based on extrapolation of a linear regression of the past 12 months of YOY changes in the CSI which are very linear (r^2=0.98) and possibly steepening .

    Extrapolating the regression forward suggests that the next 3 months will show a little bit of a spring bounce, and after that the deflation will continue to progress below the current prices.

  48. 48
    david losh says:

    yea, about my website. i don’t have a lot of time. my site is not a capture site. i don’t collect personal information it’s just there to use.

    i have another site at and a blog at the idea was to put together a one resource place for construction services.

    i like driving around in my truck with the dogs. most of my career is centered around running crews of construction workers. the real estate thing is a part of that.

    when we work on a place for a couple of months then the thieving real estate agent comes in and makes as much as we do it’s kind of nutty. at the same time i watch the thieving real estate agent tell a home owner to do ten thousand dollars worth of work to a place so the thieving real estate agent can under price the place for a quick sale.

    there should be a place where people can go, good market or bad and get service they can trust. when you see my guys and i it’s a little different than you might imagine. we’re good people trying to do the right thing.

    so i come here to learn. three guys discussing the data, WTF?

    you guys have good ideas about the economy and trends, it’s information that Real Estate sites should be offering but don’t.

  49. 49
    Ubersalad says:

    Those other sites are also very bad, but I guess just slightly less bad.

  50. 50
    david losh says:

    no, they are bad. they’re just there. i’ve been looking to get them consolisated into one place as one set of resources. we want to offer an on-line service for real estate needs. we’re talking about wood structures mostly that need help.

    rot, design, landscape, construction, or painting could be addressed by video, i think. we have experimented with photos and that didn’t work in terms of scope. so video seems like a good way to get a clear picture of the scope of work.

    rather than me go out, look, and make a judgement call about a project, and we are talking about project houses, or buildings, you can video a project, send it to us, we look at the video and make a determination. we can refer the work, or make suggestions.

    the real estate portion is just a piece in an over all puzzle of bringing a property to market. so yea, i’m not smart, i do need help with the web sites to accomplish my goals.

  51. 51

    David Losh,
    Not knowing how to design a website doesn’t make you not smart. In fact, reading your posts over the last many months I get the feeling that you’re quite intelligent.
    Oh, there are times I vehemently disagree with your opinions, and there are times I think you’re just plain nuts, but I’ve always thought of you as intelligent.

  52. 52

    […] Case-Shiller: Seattle Prices Rewound to Summer ‘06This link shows that despite John Curley’s apparent skepticism about falling home prices in Seattle, the best available index shows that as of February, prices have fallen back to levels last seen in July 2006. […]

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