Case-Shiller: Seattle Slipping Behind in Summer

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

Up 0.1% June to July.
Down 6.4% YOY.
Down 28.5% from the July 2007 peak

Last year prices rose 0.1% from June to July and year-over-year prices were down 1.6%.

Seattle’s Case-Shiller index has risen now for five months in a row, but keep in mind that they pretty much always rise in the spring and summer months.

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

Seattle’s summer seems to be coming in a lot less strong than most of the other markets around the country.

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

  • Detroit at +1.2%
  • Washington, DC at +0.3%
  • Boston at -1.9%
  • Denver at -2.1%
  • Dallas at -3.2%
  • Los Angeles at -3.5%
  • New York at -3.7%
  • Charlotte at -3.9%
  • Miami at -4.6%
  • Atlanta at -5.0%
  • Las Vegas at -5.4%
  • Cleveland at -5.4%
  • San Francisco at -5.6%
  • San Diego at -5.9%
  • Tampa at -6.2%

Just four cities were falling faster than Seattle as of July: Chicago, Portland, Phoenix, and Minneapolis.

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

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-eight months since the price peak in Seattle prices have declined 28.5%, the same as last month, up 2.4 points off the low. Four years. What a ride.

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 -8.4%, Los Angeles at -3.5%, and San Diego at -5.9%.

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, 09.27.2011)

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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.

23 comments:

  1. 1

    Tim wrote: “Seattle’s summer seems to be coming in a lot less strong than most of the other markets around the country.”

    The graph right above that quoted material shows the best performing city is Detroit. Given the fact that city is one of the few under 2000 C-S values, I’m not sure winning that race is the thing you want to do! ;-)

  2. 2
    JoeBlow says:

    The reality is, the vast majority of the houses on the market are stale… I’ve been shopping for houses in Queen Anne, Madison Park/Valley and W. Bellevue and have seen very little that really sparked my interest. The houses that are selling are often very well priced and move very quickly, but they have been greatly reduced from their peak pricing. I see too many houses that are 5-10% below peak pricing with no price drop in months/years…

  3. 3
    patient says:

    RE: Kary L. Krismer @ 1

    Those cities that has around 2000 C/S values might actually have a chance of a real sustained recovery with decent sales volumes and some stability. Cities like Seattle are still deep into the land of denial and will continue to be a sick market with low volumes and trending down. So for agents like yourself I suspect you want Seattle to be a “winner” on that graph.

  4. 4
    Dirty Renter says:

    RE: Kary L. Krismer @ 1
    I was watching ‘American Pickers’ last week and they ‘picked’ a huge brick building, which they said was the worst block in Detroit. The guy who owned the property was living there and had put a park-like train around his properties for ease of traveling. He also looked like an elongated version of Bob Dylan. One can only infer that we must ‘buy now or be priced out forever’?

  5. 5

    I Agree Tim

    The MSM made a big to do over nothing that July’s home prices went up month to month, when its the long trend YOY, that you used, that really makes a trend.

  6. 6
    3rd Generation says:

    Very Nicely Put JB:

    “2. JoeBlow
    September 27, 2011 at 9:43 am | Permalink
    The reality is, the vast majority of the houses on the market are stale… I’ve been shopping for houses in Queen Anne, Madison Park/Valley and W. Bellevue and have seen very little that really sparked my interest. The houses that are selling are often very well priced and move very quickly, but they have been greatly reduced from their peak pricing. I see too many houses that are 5-10% below peak pricing with no price drop in months/years… ”

    or: The same crap with delusional sellers/ used-house peddlers and greedy banks/lenders signed up for the ‘hopium and changeum’ plan… Well, Good Luck with that.

    Attn. ‘owners’: Remember, property taxes due next month in King County. . .

  7. 7
    Scotsman says:

    Lots of pendings falling apart out in the country- four homes we’ve been watching all went pending within the last month. All are now back on the market.

  8. 8
    David Losh says:

    I hate tableau graphs

  9. 9
    fubarrio says:

    RE: Scotsman @ 7 – i’ve seen this trend mentioned, but i’m curious if some of the folks in the industry can provide some insight as to why seemingly so many transactions are going pending and falling apart b4 being finalized.

    some guesses:

    1.) financing got ‘tougher’ (?) this one, i’m not so sure cuz the CA realtors always insisted you were prequal’ed b4 they’d even bother showing you around.

    2.) pendings are actually short sale attempts that never make it through the bank’s approval process.

    3.) sellers have no financial room to negotiate, so after the inspection when the prospective buyer goes back to negotiate more favorable terms the seller doesn’t have the $ to budge

    4.) all of the above (?)

    what say you experts in the field?

    t

  10. 10
    Bingo says:

    RE: fubarrio @ 9

    I’m puzzled by that also.

    Re: 1.) – I’m assuming that any legit buyer is getting prequalified and knows what they need to document in order to close. Any Realtor spending time with prospects not prequalified are wasting their time.

    Re: 3.) – How can so many homes fail inspection? Does every home in the Puget Sound area have a leaky roof or some other malady that squirrels the deal?

    Re: 2.) – I suppose this might be part of the issue. The short seller & buyer agree to price & terms (deal goes pending), and, the bank nixes the deal. If this is the case, there seems to be an opportunity for the Realtor community to ascertain a price that the lender would actually accept before listing the home. Otherwise, what a waste of time for all parties involved.

  11. 11

    By fubarrio @ 9:

    RE: Scotsman @ 7 – i’ve seen this trend mentioned, but i’m curious if some of the folks in the industry can provide some insight as to why seemingly so many transactions are going pending and falling apart b4 being finalized.

    some guesses:

    1.) financing got ‘tougher’ (?) this one, i’m not so sure cuz the CA realtors always insisted you were prequal’ed b4 they’d even bother showing you around.

    2.) pendings are actually short sale attempts that never make it through the bank’s approval process.

    3.) sellers have no financial room to negotiate, so after the inspection when the prospective buyer goes back to negotiate more favorable terms the seller doesn’t have the $ to budge

    4.) all of the above (?)

    what say you experts in the field?

    t

    All of the above. Pendings falling apart is more common in the less expensive tier. Some of them are short sales, and most of them fall apart because buyers lose patience waiting for lender approval.
    Some of it is due to inspection issues, where the buyer gets scared off by the magnitude of the repairs needed and just decides to walk rather than try negotiating, or the unwillingness/inability of the sellers to either make the repairs, or offer a lower price.
    I don’t think the financing has much to do with pendings going back to active, other than appraisal issues. In some cases, the appraisal will come back lower than the agreed upon price, and the seller will be unable to lower the price to the appraised value.( The appraised price will push the deal into short sale territory).
    I’d bet that the ratio of pending 600,000 dollar houses going back to active is one third of the 250,000 dollar houses pending going back to active.
    The other thing that can kill a deal is the a

  12. 12

    By Bingo @ 10:

    RE: fubarrio @ 9

    I’m puzzled by that also.

    Re: 1.) – I’m assuming that any legit buyer is getting prequalified and knows what they need to document in order to close. Any Realtor spending time with prospects not prequalified are wasting their time.

    Re: 3.) – How can so many homes fail inspection? Does every home in the Puget Sound area have a leaky roof or some other malady that squirrels the deal?

    Re: 2.) – I suppose this might be part of the issue. The short seller & buyer agree to price & terms (deal goes pending), and, the bank nixes the deal. If this is the case, there seems to be an opportunity for the Realtor community to ascertain a price that the lender would actually accept before listing the home. Otherwise, what a waste of time for all parties involved.

    No house “fails” an inspection, and even in brand new houses, an inspector will find things wrong.
    After an inspector issues the inspection report, the buyer can choose to just accept everything and proceed, ask the seller for repairs of some or all of what is found, or just walk away and cancel the deal. As an agent, I’ve dealt with all three.
    After you ask the seller to make repairs, the seller can agree to do them, or some of them,, or offer to lower the price, or say ” I ain’t doin’ nuthin. Take it or leave it.”
    So there are lots of things that can kill a deal.

  13. 13
    Bingo says:

    RE: Ira Sacharoff @ 12

    Agreed. But for a Pending deal to fail, doesn’t it need to fall into the category of ” I ain’t doin’ nuthin. Take it or leave it.”? Seems to me that needs to be a high $$$ problem for a deal to fail. Do most homes for sale have high $$$ problems that need to fixed?

  14. 14
    David S says:

    I figured roof and paint into a short sale offer once. It was accepted. Then I discovered massive carpenter ant infestation and polybutylene piping. Rather than counter that into a price reduction, we rescinded.

    Funny thing is it sold for what our first offer was.

    How much do you all think a roof, re-paint, repipe, and new bathroom (where the ants were in the walls) would reduce value on a 3000 sf two story 1989 in Maple Valley?

    What’s nice about the poly pipes is the agents tout them as ‘well it’s not leaking so there is no problem with it’. Yeah right.

    Awe, it’s just cosmetic!

  15. 15
    Sweet Pea says:

    RE: fubarrio @ 9

    Not an expert in the field, and not a residential purchase, but I’ve recently been involved in an attempted purchase of undeveloped land, multiple parcels/sellers. Delusional asking prices, shady broker, shady/delusional sellers, (as an aside, also bizarre purchases by an entity that should be more accountable), multiple 11th hour revelations.

    Just really a whole lot of ick about the whole thing, and finally a hint of desperation in the air on the part of multiple distressed sellers. What a total racket. Really doesn’t motivate me to get any closer to enter into a personal real estate purchase process.

  16. 16
    ARDELL says:

    RE: fubarrio @ 9

    In many ways negotiating the home inspection to a successful conclusion takes a lot more skill than negotiating the price and terms of the original contract. A lot of “should and should nots” can get in the way and create emotional reactions. The buyer “shouldn’t” be asking for that. The seller “should” give me that or “should have” told me about that on the Seller Disclosure form.

    Lots of room for “Just really a whole lot of ick…” As Sweet Pea said.

    A small issue, if not handled well by the agents, can cause a sale fail. A seller caught in a lie can equal bye in a real hurry. Sometimes you identify a problem, but the remedy is not as easy to ascertain. I was amazed we were able to hold this one together.

    http://www.realtown.com/Ardell/blog/home-inspection/extreme-home-inspection

    I just finished another sale for that same seller and it easily could have fallen apart on inspection. The buyer asked for a couple of things the house didn’t really need. It’s important that the seller stay focused on the big picture, vs the exact nature of what the buyer may want. That is not always easy. If the agents are merely relaying messages back and forth between the buyer and the seller, vs counseling them to their best possible response without emotion, sales can very easily fall apart on inspection, and do.

    Most always it is because someone does or doesn’t “do” what the other thinks they “should do”.

    Another HUGE problem right now is the lender will not allow additional credits when the buyer has already maxed out their lender approved credit allowance in the original offer toward seller paid closing costs. Just had one like that. The amount the buyer asked for toward closing costs already exceeded the amount the buyer’s lender would allow. Then at inspection the buyer can’t get a credit if he wants it, even if the seller is willing to give it to him. We worked it out, but it wasn’t easy.

    A sale can be set up to fail from the time the offer is written
    http://raincityguide.com/2011/06/15/why-are-so-many-pending-sales-failing/
    if the buyer’s agent isn’t properly surveying the inspection needs in advance of writing the offer.

    An agent should be able to tell if a house is going to need a roof or a hot water tank or new heater. Or if it has failed siding or wood rot …before the offer is written. Maybe not with 100% certainty, but a fair guess as to probability. More often than not, a sale that fails at inspection is largely due to the fact that it was written in a way that had no way to succeed from the getgo. If the agents can’t provide the satisfactory answer to the parties…it will often fail. If the agents are prepared for whatever the transaction may need for it to succeed…a near impossible situation can turn out well.

    Legitimate “failed inspection” usually involves foundation problems or wood destroying insect problems. Often those are just ‘walk away” items. Bugs because they are often behind walls, as David S. pointed out. You can’t really see the extent of the damage without ripping off siding or ripping out walls. Most sellers are not willing to do that, and no home inspector is allowed to do that.

    Foundation problems are rare. I’ve never listed a house with a foundation problem, and likely wouldn’t. I’ve had to cancel two on foundation problems. Neither was a big surprise. In both the seller lied as to the fact that they had resolved the issues.

    As I said earlier…lie = bye. You can never work out a problem when one of the people needed to resolve the issue to everyone’s satisfaction is concealing it or lying about it. Just walk away as soon as you catch someone in a lie. Unfortunately the person lying is often the agent and not the seller…but that’s just how it goes sometimes.

  17. 17

    By Bingo @ 13:

    RE: Ira Sacharoff @ 12

    Agreed. But for a Pending deal to fail, doesn’t it need to fall into the category of â�� I ainâ��t doinâ�� nuthin. Take it or leave it.â��? Seems to me that needs to be a high $$$ problem for a deal to fail. Do most homes for sale have high $$$ problems that need to fixed?

    Sometimes it isn’t big $$ money problems that kill the deal. If the seller bought the house at a much higher price than they’re selling it for, maybe they can’t afford to spend any money on repairs or be able to lower the price. Some buyer’s agents like to hammer the seller on the inspection, and if they present a huge list of repairs to be made, but the seller feels insulted by these demands, it could kill the deal. There’s more to it than just being big money problems. Stupid things kill deals all the time.

  18. 18
    Cheap South says:

    By Ira Sacharoff @ 17:

    By Bingo @ 13:

    RE: Ira Sacharoff @ 12

    Agreed. But for a Pending deal to fail, doesn’t it need to fall into the category of � I ain�t doin� nuthin. Take it or leave it.�? Seems to me that needs to be a high $$$ problem for a deal to fail. Do most homes for sale have high $$$ problems that need to fixed?

    Sometimes it isn’t big $$ money problems that kill the deal. If the seller bought the house at a much higher price than they’re selling it for, maybe they can’t afford to spend any money on repairs or be able to lower the price. Some buyer’s agents like to hammer the seller on the inspection, and if they present a huge list of repairs to be made, but the seller feels insulted by these demands, it could kill the deal. There’s more to it than just being big money problems. Stupid things kill deals all the time.

    I have a friend trying to short sell their home (in FL); the inspector came up with “ac/heat unit” leaks, and the water heater (gas) in the garage needs to be raised on a platform (18″ above ground) as per current code. My friends just repaired the ac ($65 service call). The water heater was grandfathered in. Buyer walked away without explanation.

  19. 19

    By David Losh @ 8:

    I hate tableau graphs

    Use Firefox with No-Script and you won’t see them unless you temporarily allow them.

  20. 20
    WestSideBilly says:

    “Meanwhile, every city actually gained ground month-to-month for the first time in a long time.”

    Including Phoenix (-0.15%) and LV (-0.20%) ?

  21. 21
    JG Bell says:

    A few months ago we compared the mo2mo sales numbers and prices in Seattle and Portland with Loss Vegas and Phoenix (Rising?), and noticed two very different trends.

    Seattle & Portland did still have a seasonal bump each year, but each year was down – the high not as high and the bottom lower. The Loss and Phoenix did not have a seasonal bump, every month was down. However, the price drops did decline more slowly during the “selling season”.

    Now, when we look at TTim’s graphs we see that there is a slight divergence between Seattle & Portland. And, between The Lost and Arid-zone-Ah.

    In the M2M numbers only Portland is above the average, and only Lost & Phoenix are still negative. However, in Y2Y very oddly The Lost is not loosing by as much as Arid-zone-Ah and Seattle & Portland.

    Why is Portland, doing better than Seattle, this month, right now? Why is The Lost finally finding some annual, but not monthly, traction? In every other category LV is still down at the bottom – unemployment, foreclosures, BKs. They also have, like Phoenix, in influx of all cash investment buyers scooping up the bottom of the pond.

    Why are Portland and not-as-Lost somewhat different, now?

  22. 22
    ARDELL says:

    RE: Cheap South @ 18

    “the water heater was grandfathered in” doesn’t mean much to someone who is buying a home. It’s like saying “we don’t HAVE TO do that”. Negotiating a home inspection is not about whether or not one must do something to sell their home, It’s about how can we resolve the buyer’s concerns. “grandfathered in” is not usually a successful response.

  23. 23
    Dave0 says:

    By David Losh @ 8:

    I hate tableau graphs

    I agree. They have caused my browser to crash on more than one occasion.

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