Case-Shiller: Spring Bounce Continues Slightly Weakened

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

Up 1.1% April to May.
Down 7.0% YOY.
Down 29.0% from the July 2007 peak

Last year prices rose 1.2% from April to May and year-over-year prices were down 1.4% (the closest they have been to zero since the peak).

Despite a continued seasonal bump in Seattle home prices, the year-over-year change fell slightly from last month, since this year’s May change was not as strong as last year’s.

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

Washington DC is still the only city still in positive YOY territory, but thanks to spring, all but three cities showed month-over-month growth. Only Tampa, Las Vegas, and Detroit continued to lose ground.

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 cities.

In May, thirteen of the twenty Case-Shiller-tracked cities experienced smaller year-over-year drops than Seattle (or saw year-over-year increases):

  • Washington, DC at +1.3%
  • Boston at -3.2%
  • Los Angeles at -3.2%
  • New York at -3.2%
  • Denver at -3.3%
  • Atlanta at -4.6%
  • Dallas at -4.7%
  • San Diego at -5.1%
  • Charlotte at -5.1%
  • Miami at -5.3%
  • San Francisco at -5.4%
  • Cleveland at -6.6%
  • Las Vegas at -6.6%

Falling faster than Seattle as of May: Chicago, Portland, Detroit, Tampa, Phoenix, and Minneapolis.

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

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-six months since the price peak in Seattle prices have declined 29.0%, slightly less than last month, up off the low again. Just two more months until the four-year anniversary of Seattle’s peak.

Here’s the “rewind” chart, to show you how much was gained, and then given back up over the last six-plus years:

Case-Shiller HPI: Seattle Rewind

The blue line on August 2005 represents the month that this site launched. As of May 2011, there have effectively been zero price gains since October 2004.

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. Portland improved slightly, but everyone else continued to get worse on this chart. Year-over-year, Portland came in at -9.1%, Los Angeles at -3.2%, and San Diego at -5.1%.

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, 07.26.2010)

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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.

27 comments:

  1. 1

    The YOY Price Drops Are Lack of Jobs Creation in the Seattle Area

    And why are we not creating jobs?

    Article:

    “…A new study by two economists at the nonpartisan American Institute for Economic Research concludes that Federal Reserve Board Chairman Ben Bernanke’s crisis management has kept interest rates so low for so long that it has deprived savers of hundreds of billions of dollars in interest income. That, in turn, has cost the economy $256 billion to $587 billion in consumption and 2.4 million to 4.6 million jobs, but has shaved between 1.75 and 3.32 percentage points to gross-domestic-product growth.

    The beneficiaries of the Fed’s policies have been borrowers. In other words, people employing record-inexpensive leverage&mdashthe grasshoppers among us&mdashhave been thriving, while the fortunes of the prudent, savings-minded ants have been wilting….”

    http://finance.yahoo.com/banking-budgeting/article/113190/feds-monetary-policies-effects-barrons?mod=bb-budgeting

    So all you “Grasshoppers in Debt” are apparrently the ones sucking the money out of the job market too, hence, real estate price declines with no end.

  2. 2
    Jonness says:

    “forty-six months since the price peak in Seattle prices…Just two more months until the four-year anniversary of Seattle’s peak.”

    Four years of putting up with a new bottom call every passing month and being told to buy now or be priced out forever.

    Keep emotions to a minimum, do your research, use logic, and don’t get caught up in short-term noise of the market. And never trust a person who will get paid a commission if you do what the person recommends and get nothing if you don’t.

  3. 3
    Jonness says:

    Contrast what most of the RE agents have been telling you for the last 4 years to the reality of Tim’s excellent chart. Always look at the big picture, and stay out of the short term hype and noise. Never ever get emotional when dealing with business transactions involving hundreds of thousands of dollars.

    http://housingcorrection.com/images/PriceTrendMarch11.jpg

  4. 4
    Jonness says:

    What has occurred has been and continues to be extremely predictable. Look at the unemployment rate and bank lending to be your guide to the future. And remember, price symmetry has the upper hand throughout the period lasting from the beginning of the distortion through the end.

    (MB/R)V=PQ

  5. 5

    […] May home prices for Seattle were down seven percent year-over-year. Voters at the Seattle Bubble (Ellis’s other project) overwhelmingly say that foreclosures […]

  6. 6
    Marc says:

    By Jonness @ 2:

    “And never trust a person who will get paid a commission if you do what the person recommends and get nothing if you don’t.

    Very sound advice.

  7. 7
    Still Anonymous says:

    If we could just get housing construction ramped up again, that would solve employment issues with tons of jobs.

  8. 8
    Roger says:

    By Still Anonymous @ 7:

    If we could just get housing construction ramped up again, that would solve employment issues with tons of jobs.

    Maybe the housing workers could build houses for each other–houses paid for by the wages the workers earned by building houses for each other. Surely this will work.

  9. 9
    David Losh says:

    RE: Marc @ 6

    Not really.

    Why is there a link to another Craig article over at the Rain City Guide in the comment section?

  10. 10
    Marc says:

    RE: David Losh @ 9 – You got me. I think Tim might have tweeted about Craig’s post over there.

  11. 11
    JG Bell says:

    Said you, Tim: “the government’s massive intervention in the market screwed with the natural flow”

    Asked we, on SNL: “Oh Really?”

    Do you remember Jan 08, when the private MBS industry had totally collapsed, removing US$ 1.5 Trillion from the funds available for home loans? Do you remember in July 08, when the Chinese informed U.S. that they would stop buying US$ 35-45 Billion of GSE securities PER MONTH? And the other half of the RE funding system collapsed? Do you remember W “nationalizing” FMae&FMac? And, why?

    What, precisely, Tim, was “normal” about 2008? The whole funding system for ALL new RE loans simply disappeared, leaving you, Tim, unable to sell you home – except to an all cash buyer. Oh, or to hold your own RE contract. What “interest” did you have in that?

    Then over US$ 2.5 Trillion of bad ARMs and subprime RE loans originated by YOUR banksters at WAMU in the Sand States, like po’ ol’ AZ, collapsed. Leaving almost everyone here more than 50% underwater or down from the peak bubble values. What precisely did “the government” do to create and/or destroy those private Wall Street bankster MBSs? What was “normal” about all that Tim?

    With the flood of foreclosures, the home building lobby – all those GD Democrats – supported a First Time Home Buyers Tax Credit. Of course, you remember that, but do you remember what the new home building starts and sales numbers WOULD have been without that sales stimulus? Do you wish to be “predictive” of how far down we would be Far Right now if W had not “nationalized” FMae&FMac? Oh, and guaranteed the Chinese their “investments” in them would now be safe – fully guaranteed by the full faith and credit of all of U.S.!! What was “normal” about all that Tim?

    After an accident many years ago the doctor finally told me we were “back to normal”. When we told our best fiend, at the time, he said: “Frankly, we were all hoping for a little better than that.”

    Are we really “back to normal”, Tim? Mind telling U.S., precisely, when and/or where that occurred?

    A few tax credit dollars bothers you, does it? How much did we “loan” the auto industry – per job created? What did we get for the US$ 3 Trillion we have spent in Iraq and Afghanistan? Peace in our time?

    And, now we will return the control of your TV set back to you – until your next visit to The Twilight Zone.

  12. 12
    DanW says:

    RE: JG Bell @ 11 – What precisely about “screwed with the natural flow” indicates TheTim is talking about anything except the housing market?

    He is reporting a fact – that the government’s interventions *did* interfere with the housing market, causing prices to rise for a short period – and now that those interventions have stopped, housing continued its downward trend.

    Note that this site is about “a housing bubble” – it’s not a general economics site.

    When you ask “are we really “back to normal”” you need to ask yourself the question – are *you* talking about the economy as a whole, or about the housing market in particular – which is what this site concentrates on.

  13. 13
    Scotsman says:

    alright let’s get back to the basics. This isn’t a “spring bounce.” It’s more of a “drop, tuck, and roll,” good to practice in preperation for the big one. Y’all rermember what to do for the big one, don’t you? That’s right- crawl under your desk, grab you ankles, then kiss ‘yer asss good-bye.

    Don’t worry- Obama has a plan. It involves corporate jets, or something. . . .

  14. 14
    Jonness says:

    RE: JG Bell @ 11 – JG: I think you are putting a lot of words in Tim’s mouth that he has never said or never intends to say. If you look at the chart in question, you can see how the Seattle market was pretty much tracking the CA market up until the government ramped up its support for housing. Once the additional support was withdrawn (not talking about all the support already in place), the markets started correcting again.

    You appear to be trying to make Tim’s statement stand for a lot more than what he expressed in the article and chart. IMO, the chart does a great job of demonstrating the temporary effect of the government housing stimulus programs that were in place at the time. If you were a long term follower of this website, you would realize a lot of people called the bottom back then, but once the support was withdrawn, prices continued to fall like a rock.

  15. 15
    ray pepper says:

    RE: Marc @ 6

    “And never trust a person who will get paid a commission if you do what the person recommends and get nothing if you don’t.
    Very sound advice. ”

    and may I add……………..Never pay “UP FRONT” any FEES upon the expectation of an ACT occurring in the future..

    Words to live by here at THE BUBBLE!

  16. 16
    Cheap South says:

    RE: softwarengineer @ 1

    Job creation might be happening, but only in one sector, a high paying sector that is; but most of the population still lives in the other beaten up economy.

  17. 17
    David Losh says:

    RE: DanW @ 12RE: Jonness @ 14

    The housing market is an indicator of economic well being. It became a driving force of the economy after WWII. We are way past that now.

    We could actually take housing and put it ina box over in the corner because we way over built, and continue to over build. We have virtually disposable housing units that are no comparison to Real Estate.

    So to point to another government action on top of all the government actions that took place over the span of sixty years, and say Ah Hah! is a very simplistic.

    I really think the speach that Bush gave about the number of new home owners as an indication of the stregnth of the economy was a bigger deal than the tax credit. How about that for some pot stirring?

  18. 18

    RE: Still Anonymous @ 7

    In Other Words

    If we could just destroy saving account interest rates with no end that create jobs and simultaneously add to our $14 trillion dollar debt to our grand children, we may be able to build a few houses for a short period, until no one lends our government anymore money. On that old “same old same old Bubble path” that CLEARLY led to our present economic destruction, soon at a theater near you.

  19. 19

    RE: Cheap South @ 16

    I’m a Skeptic on Higher Incomes Increasing Too

    A lion’s share of our college educated living in their parents’ basements attests to that fact. BTW, the college educated with experience have more unemployment than the unskilled today too [15% of the workers, 20% of the unemployed].

    Ya got some written proof to back up your verbal?

  20. 20
    expatom says:

    Tim,

    I’ll repeat my post of last time, which is the SEASONALLY ADJUSTED Case-Shiller shows Seattle prices appreciating 3 months in a row as well. I know, the seasonal adjustment in CS has problems that have to do with the bust distorting the estimation of seasonal factors. So I estimated my own seasonal factors using the BLS X12 procedure with the sample stopping at December 2006. When I apply those factors to the unadjusted data I still get three months of appreciation.

    My point is this is not just a “Spring bounce” story. The bear gallery will hate it, but admit that it looks like the market has bottomed, at least for now.

    Full disclosure: I am NOT in the real estate business.

  21. 21
    JG Bell says:

    Tim, please reconsider posting my second comment, as it points to a very disturbing slope. And, Tim, we trust you did not take my comments to be personally about you. They were not. And, your charts are much better than anything we have seen for Cal, Nev, Fla OR even, especially AZ. Nice work.

    The 2nd comment:

    Tim, the slope of your CS – Seattle home price index, from 10Sep to 11Feb is stunning. What a “downer”!

    Has it really been THAT bad? Do we – you, me and U.S. – have any reason to believe that the 2nd half of this year will not be that bad, too? Don’t know if you are trying to sober U.S. up, or drive U.S. to drink.

    Recently, we compared the last five year M2M for Seattle-Portland with LossVegas-Phoenix. SeaPo did show slight selling season gains, but then dropped back down lower every Y2Y. LossPho had NO upticks at all, only slightly slower losses in the selling seasons. Simply all down hill.

    IF it ain’t over until The Fat Lady sings, what are we gonna do, if she ain’t fat no’ mo’???

  22. 22
    JG Bell says:

    The Point of the slope comment is that last summer there was another uptick, but then all Hell broke through the floor.

    Will this Fall & Winter be better; or as bad as, or much worse than last year?

  23. 23
    Jonness says:

    By expatom @ 20:

    When I apply those factors to the unadjusted data I still get three months of appreciation.

    My point is this is not just a “Spring bounce” story. The bear gallery will hate it, but admit that it looks like the market has bottomed, at least for now.

    Where did you come up with the idea that 3-months appreciation in the Case Shiller equates to a bottom? If it had any relevance what-so-ever, we would have hit bottom in 2010. Instead, we continued to fall like a rock once the hot selling season ended.

    http://housingcorrection.com/images/PriceTrendMarch11.jpg

    After four years of this misery, the unemployment rate is still greater than 9%, and the banks are sitting on a record $1.5 trillion in excess reserves because they are afraid to lend the money out to American citizens for fear they won’t get it back. They are choosing to collect a measly 0.25% interest on the money as opposed to risking lending it to American workers at 5%. Doesn’t that tell you anything about the magnitude of the problems we are facing?

    As sad as it seems, borrowing more money from China, or simply having Bernanke ramp up the printing presses won’t change the overall economic outlook. It will only temporarily trick the unsuspecting into believing everything is going to be OK. As fantastic as the “borrow your way out of debt” theory sounds, it breaks down right about the time the money needs to be paid back. Just how long do people believe we can sustain borrowing 40 cents on every dollar we spend? In truth, it’s a one-way ticket to the poor house.

    The overall Seattle house price trend remains down, just as it has for the previous 4 Springs and counting. Live frugally, save money, and prepare yourself for the bottom of the housing market. Eventually, jobs will come back, and banks will lose their fear of lending money to American workers. In the meantime, Seattle-area house prices remain far too high compared to the economy we are in and the economy we are facing in the future. From a purely financial standpoint, other investments make way more sense and represent a golden opportunity to protect yourself from the sucking sound that accompanies the wealth of average American households vanishing into thin air.

  24. 24

    RE: Jonness @ 23RE: expatom @ 20 – Both the bulls and the bears need to quit pretending that data from the past indicates the future. We’ll know when we’ve hit a true bottom only 2-3 years out from that point.

  25. 25
    Jonness says:

    By Kary L. Krismer @ 24:

    RE: Jonness @ 23RE: expatom @ 20 – Both the bulls and the bears need to quit pretending that data from the past indicates the future. We’ll know when we’ve hit a true bottom only 2-3 years out from that point.

    You’ll recall we had a discussion last Spring where you claimed I couldn’t possibly know the market would continue down in the future. Yet, here we are a year later, and I’ve been proven right again. It doesn’t require 2 to 3 years to know we’ve hit a new low. In fact, the last time around, it only took a few months to prove me right. So while we won’t know for sure we’ve hit a bottom until 2-3 years after it occurs, data from the past can be used along with current and potential future data to accurately predict certain points where we are definitely not at the bottom. For instance, in 2007, you bought a house, and I chose to hold off and wait for the market to correct.

    Some people are better at football, others make better lawyers, and others make better economic forecasters. Your brain is well set up for legal matters and not so well set up for forecasting. My brain is not so well set up for legal matters and well set up for forecasting. And neither of us is particularly good at football.

  26. 26

    By Jonness @ 25:

    By Kary L. Krismer @ 24:

    RE: Jonness @ 23RE: expatom @ 20 – Both the bulls and the bears need to quit pretending that data from the past indicates the future. We’ll know when we’ve hit a true bottom only 2-3 years out from that point.

    You’ll recall we had a discussion last Spring where you claimed I couldn’t possibly know the market would continue down in the future. Yet, here we are a year later, and I’ve been proven right again. It doesn’t require 2 to 3 years to know we’ve hit a new low..

    LOL.

    Last point first. Rather obviously you know you hit a new low the month after you hit a new low. (Or if you’re going by C-S data 3-4 months later). That’s rather obvious, because it’s a new low. The topic was when you hit a bottom. For that you won’t know for 2-3 years, because it could be a false bottom. If you disagree with that, do you think we hit a bottom because the last few months have been up?

    Second, the issue was using past data to try to predict the future. Charting in another words. Just because the last X months were down (or up) it doesn’t mean the next Y months will be up (or down). In other words, you cannot tell where we’re headed by looking at the charts above.

    Third, when there are two choices, up or down, being “right” isn’t really that amazing of a claim. So don’t pat yourself on the back too hard.

  27. 27
    expatom says:

    RE: Jonness @ 23
    Jonness,

    Please note my caveat “…, at least for now.” I should have also added, “at least in the top tier.” This may indeed be another false dawn but there are a couple of reasons why it may not be. First, the King County unemployment rate has actually fallen down to 7.9% while the national rate has risen to 9.2%. Second, retail, wholesale, and even construction spending are up over 10% compared to this time last year in the county, again in contrast to the rest of the country. Of course, the national situation could pull it all down again.

    My main point is that, however fragile the bounce is, and however narrowly confined to the top tier, it cannot be explained away as merely a seasonal effect, not when seasonally adjusted data are also showing a three month increase.

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