Case-Shiller: Spring Still Bouncing, But Weakened Further

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

Up 0.7% May to June.
Down 6.4% YOY.
Down 28.5% from the July 2007 peak

Last year prices were flat from May to June and year-over-year prices were down 1.8%.

Seattle’s Case-Shiller index has risen now for four months in a row, but considering that we it was during the months that are traditionally the strongest for home prices, that doesn’t exactly mean much.

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):

Despite the spring bounce going on throughout the country, every city is currently in negative YOY territory (including DC after a recent revision). Meanwhile, every city actually gained ground month-to-month for the first time in a long time.

Case-Shiller HPI: Month-to-Month

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 June, thirteen of the twenty Case-Shiller-tracked cities experienced smaller year-over-year drops than Seattle:

  • Washington, DC at -1.2%
  • Boston at -2.1%
  • Denver at -2.5%
  • Los Angeles at -3.4%
  • New York at -3.6%
  • Charlotte at -4.1%
  • Dallas at -4.3%
  • Atlanta at -4.9%
  • Miami at -5.1%
  • San Diego at -5.3%
  • San Francisco at -5.4%
  • Las Vegas at -6.0%
  • Cleveland at -6.1%

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

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

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-seven months since the price peak in Seattle prices have declined 28.5%, slightly less than last month, up 2.4 points off the low. Next month’s data will be the four-year anniversary of Seattle’s peak.

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 -9.6%, Los Angeles at -3.4%, and San Diego at -5.3%.

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, 08.30.2010)

0.00 avg. rating (0% score) - 0 votes

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.

25 comments:

  1. 1
    One Eyed Man says:

    In a cyclical economy, fiscal and monetary stimulus probably aren’t the answer to systemic problems. But the CS graphs provide at least some evidence that they are the equivalent of shock absorbers that help to dampen the magnitude of the cyclical oscillations pending a return to equilibrium.

  2. 2

    RE: One Eyed Man @ 1

    Call SWE Pessimistic One Eyed Man

    But I’ve heard almost all the MSM pundits incorrectly [IMO] allege that the drunken sailor Dem/Rep stimulus/QE spending help divert us from a depression.

    A wild allegation in my book, when ghost [giveups and not counted, like college grads], severely under-paid [more college grads here too] and the small percentage MSM counts as U3 unemployment make up about 25% [my best educated guess] of the legal American workforce. Sounds CLEARLY like Great Depression counts, before the BLS [Big Lipstick Spread?] low-balled the MSM unemployment reporting during the Clinton administration and put lipstick on the economy pig.

    The only way to prove the drunken sailor spending actually did any good, was not to have spent it in the first place and seen what happenned [actuals]. IMO, we’d be in much better shape today if we’d let the too big to fail, just fail.

  3. 3
    m-s says:

    Hi-
    Here’s my problem. If we posit that in this housing/financial/stock sector mess, we have lost (say) $6T, which was (unfortunately) treated as real money and spent, along with who knows how much credit card debt; how is it that $1-2T stimulus is drunken sailor spending? Seems like the drunken sailor spending already happened, and we did it, not the government (well, them too)! Stimulus spending seems to me to be only slightly inebriated, not drunken.

  4. 4
    One Eyed Man says:

    RE: m-s @ 3

    I’m not a fan of Greenspan but the term “irrational exuberance” and Shiller’s “animal spirits” seem to capture the mob psychology of momentum investing (which arguably is just wasteful spending with a debt hangover after the buyer’s equity evaporates).

  5. 5
    m-s says:

    Hmmm. “Spirits”, “drunken sailor spending”, “hangover”, “irrational exuberance” (in the Dionysian sense), “evaporation” – comparing our financial motivations to drinking – sheesh, its enough to give alcohol a bad name.

  6. 6
    Steve Tytler says:

    It’s way too early to say the housing market has “bottomed” but the latest stats are encouraging.

    Home buying activity is up, housing inventory is low, interest rates are ridiculously low and home prices are not likely to fall more than about 5-10% from their current levels (in my opinion) so … dare I say it … it’s a great time to buy.

    Even “The Tim” took the plunge and bought a home, so I know the “bottom” must be near! LOL

    I took a lot of grief on this blog years ago when I predicted that the Seattle housing market would NOT follow the “boom-bust” cities of Phoenix, Las Vegas and San Diego down the rat hole and the stats have proven me to be correct.

    Seattle home prices dropped only 30% vs. 50-60% for the worst of the “boom-bust” cities.

    Of course, you all know there is no such thing as the “Seattle housing market” as defined by Case-Shiller because they lump in homes in Seattle’s hot Green Lake neighborhood with homes located in painfully stagnant far out suburbs and rural communities. All real estate is “local” and as Tim has shown with his cool “heat maps” some neighborhoos are way hotter than others.

    So I just want to say “keep the faith” … Seattle area real estate will bounce back eventually.

    Don’t buy a home unless you plan to live in it for 10 years and you will be fine.

  7. 7
    Scotsman says:

    RE: m-s @ 5

    “Hmmm. “Spirits”, “drunken sailor spending”, “hangover”, “irrational exuberance” (in the Dionysian sense), “evaporation”

    Sounds more like One Eye’s 4th of July party. New meaning for the term “blow-out.”

    A little reading and some of that pesky math suggests that we’d need a new stimulus of about $1.6T to get things moving and drive unemployment down to 8%. The resulting “recovery” would, of course, only last as long as the stimulus. And there’s no political way to pass that much more borrowing. So we’ll continue to drift down.

    I think the low interest rates have pushed some buyers off the fence, and that we’ll see a continued boost through the end of the summer. But winter will not be kind to thew housing market. Equity “evaporation’ will be back in force.

  8. 8
    Scotsman says:

    RE: Steve Tytler @ 6

    ” home prices are not likely to fall more than about 5-10% from their current levels (in my opinion)”

    Hey, we agree! I don’t think prices will fall much more than 5-10% either- at least not between now and next summer. Beyond that, I get more bearish every day. ;-)

  9. 9
    fubarrio says:

    RE: Steve Tytler @ 6 – i realize you gotta talk your book, but just cuz we haven’t dipped as far as phoenix, doesn’t mean we won’t. we are TRAILING those ‘boom/bust’ cities and not diverging from the path they’ve predicted for us by much — yet.

    btw, low interest rates don’t indicate a good time to buy — to the contrary — only a good time to borrow.

  10. 10

    RE: Scotsman @ 7
    I don’t think it’s the low interest rates that have pushed buyers off the fence. I think it’s just a seasonal thing. Buyers drop off the face of the earth when the rains begin, so they’re just figuring they better “chocolate” or get off the pot, as if it’s impossible to buy a house when it’s raining.

  11. 11
    Urban Artist says:

    Well if we can find anything worth buying I don’t mind buying in the rain. At least you can see if the basement leaks or your house needs sandbags.

  12. 12
    Lurker says:

    RE: Steve Tytler @ 6

    A 5-10% decrease is potentially losing up to half of my down payment. Doesn’t get me too excited especially when I know rates are going to continue to stay low for some time.

    I do agree though, don’t buy a house unless you plan on living in it a long time.

  13. 13

    By Urban Artist @ 11:

    Well if we can find anything worth buying I don’t mind buying in the rain. At least you can see if the basement leaks or your house needs sandbags.

    This year was very nice. You could actually see if the house had water issues all the way through mid-July!

  14. 14
    toad37 says:

    RE: Urban Artist @ 11 – Very good point.

  15. 15
    Average Joe says:

    As an ordinary buyer, here is the problem I am running into… There are very few homes for sale in desirable/popular neighborhoods. In those areas, any property that is priced around true market value will be sold quickly with possible multiple offers. In some cases, situation is not much different than 2006-7 – that is multiple offers, bidding, foregoing inspection etc. There are plenty of rotten listings too out there that no one wants.

    Makes no sense to say that it is a buyers market. It may be in some areas, but not everywhere.

  16. 16
    Scotsman says:

    RE: Ira Sacharoff @ 10

    You’re probably right, it just seems to me that everything I’ve been watching for the last couple of months suddenly went pending. Only the cheap stuff though, under $300K. I keep thinking maybe I’ll pull a “Tim” and buy something cheap that can turn into a rental later, but even that has me nervous now. The national/world economic situation isn’t looking very strong.

  17. 17
    Jonness says:

    By m-s @ 3:

    Stimulus spending seems to me to be only slightly inebriated, not drunken.

    How so? Let’s say you drink a bottle of vodka in an hour and get raging drunk. Then over the course of the next hour, you only drink a quarter bottle of vodka. What happens? You’re even drunker.

    IMO, you are assuming the effects of the first bottle wore off prior to drinking from the second. But in order for that to have occurred, we would have had to pay back the money we spent the first time around. Otherwise, borrowing more is simply cumulative as opposed to a brand new fresh start on our balance sheet.

  18. 18
    David S says:

    Maybe only another 5-10%! What’s $30,000 to $50,000 dollars to stop someone, nothing?

  19. 19
    Jonness says:

    By Steve Tytler @ 6:

    Home buying activity is up, housing inventory is low, interest rates are ridiculously low and home prices are not likely to fall more than about 5-10% from their current levels (in my opinion) so … dare I say it … it’s a great time to buy.

    Said like a true RE agent who speaks for what rewards himself as opposed to the buyers he represents. Yadda, yadda, yadda. Everytime we get a Spring bounce, the RE agents claim it’s a great time to buy. Yet, yesterday’s home buyers are today’s underwater homeowners. It gets old in a hurry for those who buy and are trapped for 30 years, but it’s great for RE agents who make 5 figures off a few hours work.

    It’s not a great time to buy when you are leveraging your life savings into an extremely volatile asset class whose overall trendline is still pointing down. Learn to read charts people. A seasonal Spring bounce is meaningless to the big picture. Draw a simple trendline, assess the volatility, and then decide if it’s a good time to buy. You will see that the overall trend in Seattle house prices is down, and it’s a highly risky time to leverage your life savings into this depreciating asset class.

    Of course we got a Spring bounce Steve. What did you think was going to happen? Look at the decline from peak chart above. We have gotten a Spring bounce every Spring since this mess occurred as well as every other Spring on record. What on earth would make anybody believe this year would have turned out to be the exception?

    This is not rocket science folks. The reason the market is tanking is because homes are not a good investment. If they were, then the price would be going up much faster than the typical Spring bounce we see every year and have come to expect will occur. Now look at the decline from peak chart again. What happens after the Spring bounce when you are in the midst of a housing bubble reset? A new winter low.

  20. 20
    David Losh says:

    Interest rates today are about at the rate of inflation so you will be paying for a non performing asset at par with inflation.

    I know a lot of stuff went pending. Some was good, a lot was very bad.

    I stood with a guy in Ballard who just bought and I see fifty thousand dollars worth of work that the place needs right now. OK he needs to spend twenty thousand on structural repair, and a bath room.

    They are a young couple, just starting out, and dad is telling ’em how it used to be fifty years ago. Today, they paid way to much for a project.

  21. 21
    Macro Investor says:

    It’s a great time to buy if you want to live in a place like Florida or Arizona where they can’t give houses away. It’s still a very bad time to buy in Seattle and California, where the bubble raged out of control and has a long way to go.

    My fear is when the government has to stop borrowing and spending trillions a year. We’re seeing that in Europe and it’s not pretty. Very high unemployment. It’ll happen here — we just don’t know when the drunk finally falls down. I agree that rates will be low until then. Low rates don’t help if your value is going down, down, down.

  22. 22
    Ray Pepper says:

    RE: Macro Investor @ 21

    100% correct…Buying here is VERY risky compared to Nevada/Arizona where they can’t give the homes away at 50k and are down 80-85%.

    Steve Tytler how is your Broker friend doing in Az? The one you you boasted about who continues to make his payments and is UPSIDE DOWN 250k and it (doesn’t bother him?) Give you 10-1 he had it foreclosed on already, in some form of short sale or deed-in-lieu or you truly hang around some STUPID people.

    Interest rates being LOW is never a reason to buy. As rates go up property values will either decline or AT BEST hold flat. Offers should be made to have sellers pay points and closing costs to UNLOAD their properties in an increasing interest rate environment. Builders do it everyday (at the least the ones that are still around).

    One of the absolute WORST times to buy is when interest rates are low. Those who “fluff” and tell you that this is a reason to buy obviously have “skin” in the game. Please peddle your horrendous home purchasing advice in your Everett blog or keep having Dori talk about how he loves Best Mortgage while your advertising dollars fall upon deaf ears at Kiro.

    Never…EVER….Buy a property because rates are low. All that matters is the PRICE paid.

  23. 23
    ARDELL says:

    RE: Average Joe @ 15

    The definition of a buyer’s market has always been 6 months of inventory or more. Some have changed that to 3 months of inventory…but that has not historically been the case. I would not say it is a buyer’s market in any of the areas where I work. Very difficult to find a good property to buy unless you catch it early on market, or it is overpriced and you are bold enough to offer it’s true value.

  24. 24
    Lurker says:

    (nevermind, it’s already been said)

  25. 25
    Mike says:

    Tim… since the Case-Schiller index for “Seattle” is a composite of 3 counties…King, Pierce and Snoho… what would the graph look like for the 3 price tiers for just King?

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.