Case-Shiller: Seattle Home Prices Fall into Fall

Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to September data, Seattle-area home prices were:

Down 1.1% August to September.
Down 6.5% YOY.
Down 29.5% from the July 2007 peak

Last year prices fell 0.8% from July to August and year-over-year prices were down 2.4%.

After increasing for five months in a row from March through July, Seattle’s index dipped a bit this month. I guess the usual spring/summer boost is already wearing off.

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):

DC and Detroit are still the only two cities in YOY positive territory in the latest update. Meanwhile, after half the cities showed month-to-month gains in August, all but three are now in negative territory as of September.

Case-Shiller HPI: Month-to-Month

Seattle continues to come in near the bottom of the heap in month-over-month changes, although Atlanta put everyone to shame this month. Ouch!

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

  • Detroit at +3.7%
  • Washington, DC at +1.0%
  • Dallas at -0.8%
  • Boston at -1.2%
  • Denver at -1.5%
  • Charlotte at -2.6%
  • New York at -2.6%
  • Cleveland at -3.1%
  • Miami at -4.0%
  • Los Angeles at -4.2%
  • Chicago at -5.0%
  • San Diego at -5.4%
  • Portland at -5.7%
  • San Francisco at -5.9%
  • Phoenix at -6.5%

Just four cities were falling faster than Seattle as of September: Tampa, Las Vegas, Minneapolis, and Atlanta.

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

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 fifty months since the price peak in Seattle prices have declined 29.5%, a point lower than last month, up 1.4 points off the low.

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. San Diego and Portland bumped up a bit in September, but Seattle and Los Angeles fell. Year-over-year, Portland came in at -5.7%, Los Angeles at -4.2%, and San Diego at -5.4%.

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, 11.29.2011)

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.

21 comments:

  1. 1
    Cheap South says:

    “Down 29.5% from the July 2007 peak”

    “…since the price peak in Seattle prices have declined 29.5%, a point lower than last month, up 1.4 points off the low.”

    I am not getting this; recently we were down a bit over 30%. What am I missing?

  2. 2
    The Tim says:

    RE: Cheap South @ 1 – Sorry, is my wording confusing? Let me try again.

    In September prices were 29.5% off the peak. In August they were 28.5% off the peak, so September is one point lower than August.

    Back in February we were 30.9% off the peak. So September’s data is 1.4 points above the low point set in February.

  3. 3

    RE: The Tim @ 2

    Sounds Close Enough Tim

    Sometimes I think 6-12 month old news is just as relevent as today’s news, especially if the MSM or other real estate pundits haven’t had time enough to “massage” the recent data, masking the actual problems they once revealed….

  4. 4
    Cheap South says:

    Thank you Tim. So it’s lower mathematically, by higher in depreciation. Time really flies, I thought the 30.9% was recent. Of course, it makes no sense for it to go to a record below peak during the summer.

    I do not have any doubt that we’ll be over 30% again in the next reading in late December. Who knows? We might hit 35% by April.

  5. 5
    WestSideBilly says:

    Wow, where’s the bottom for Vegas? Almost time to rescale the chart on the down side.

  6. 6
    Jonness says:

    Cool! The pattern looks nearly identical to last Fall. From there, we dropped another 8.4% before Spring took temporary hold of the market.

    We appear to be heading toward a new record low since peak.

  7. 7
  8. 8
    Scotsman says:

    “In a rare moment of semi-lucid disclosure, the National Association of Realtors (“NAR”) reported that home sales contracts are falling apart TWICE as often as they did last year, according to the numbers released at its annual convention in Anaheim, California.”

    http://www.nationalmortgagenews.com/

    “In an article published in National Mortgage News, titled: NAR: Sales Falling Through Twice as Often, the NAR said that recently 18% of its members are reporting “contract failures,” which is double the number that were being turned down one year ago.

    Why? Well, according to the Realtors, it’s credit scores and appraisals coming in too low.”

  9. 9
    Scotsman says:

    How low will we go? If you focus on only the CS data and assume 3% inflation for home prices is the long term norm then it’s pretty easy to make the case that we are at or near bottom. I don’t agree. Far too many people see the current downturn as nothing more than a particularly nasty bump down in the normal business cycle. They completely miss that this time IS different, that much more is going on than just standard business cycles. Over the last 40 years the nature of what we define as money has changed, the leverage of both the government and the general population has changed and standard assumptions about wage and productivity gains have completely missed the mark. A prime example is the expectation of annualized 8% returns as the foundation for modern pension plans- instead we got a decade of nothing.

    I used to argue Japn was completely different from the U.S. and that our experience wouldn’t match up to their 20+ years of falling prices and zero growth. I’ve changed my mind. Japan is a perfect example of where we are headed. With government debt equal to 200+% of GDP Japan has barely kept themselves alive. Inflation? Stimulus? Growing their way out? Nope- check this:

    http://www.doctorhousingbubble.com/wp-content/uploads/2011/11/japan-inflation-rate.png

  10. 10
    Scotsman says:

    To continue the above- three or four more years of downward trending prices, at least. More if the world economy and governments really do blow up:

    http://www.doctorhousingbubble.com/wp-content/uploads/2011/11/japan-and-us-home-values.png

    http://www.doctorhousingbubble.com/wp-content/uploads/2011/11/us-vs-japan-home-prices.png

  11. 11
    Azucar says:

    RE: Scotsman @ 9

    “They completely miss that this time IS different…”

    This sounds like the pink pony thing in reverse…

    I dub it:

    THE BLACK PONY THEORY!!!

    Not that I think it’s wrong. Just that it seems that momentum is building on the negative sentiment side, and once that’s permeated enough then we WILL have hit bottom.

    My guess is that even if we’re approaching the “right pricing” for housing there will be a good deal of overshoot on the low side before it picks back up and settles onto the long term slow growth/inflation tracking line. Maybe 10 or 20 percent below the “right price trend line”? To bad I don’t know exactly where that “right price” is.

  12. 12

    By Scotsman @ 8:

    Why? Well, according to the Realtors, itâ��s credit scores and appraisals coming in too low.”

    Pure bull. And you can tell by the claim that it’s credit scores. Very few contracts exist where the credit score wasn’t known prior to mutual acceptance.

    Now it could be that the buyer was using a mortgage originator that they discovered through their brother, and that mortgage originator didn’t know what they were doing. Sales will flip on financing where the loan originator doesn’t know what they are doing.

    Also, your link doesn’t get to an article on the topic, but past news I’ve seen on that doesn’t indicate a statistic where appraisals are a problem, because they indicated something like maybe 30% of agents had one or more transactions flip based on an appraisal. Given the fact that most agents do more than one transaction a year, that’s not a terrible stat.

    If you can find a direct link to the article though, I’d like to see it.

  13. 13

    RE: Scotsman @ 10 – Great, when the simplistic theory about Seattle being X months behind San Diego falls apart, people move to some other area that in the past has shown a similar pattern. They have to look so far that it’s no longer even in this country!

    That type of an analysis is a really good way to lose money investing in stocks.

  14. 14

    RE: Scotsman @ 8

    Yes Scotsman

    I’d add another anchor to the buyer qualification….low wages and no credit cards, just debit [cash] mostly now. It sure explains why oil per/bbl is going up to a $100 and gas at the pump is suddenly significantly deflating in price….no one can afford gasoline anymore apparently, IMO. Or, another possibility, the buying rush to Christmas is stalled and gasoline/food is the anchor; so they decided to lower gas prices [makes one wonder how much they’ve been gouging us on gas all year long].

  15. 15
    David Losh says:

    I don’t see the 30% pricing drop in properties listed for sale. I’ll look at solds next week end, but right now I just don’t see it. I’m seeing 2006 pricing,

    Next, is that we work with a great Real Estate agent who lists properties 10% below Fair Market Value, of the CMA, and his listings sell, readily.

    Let’s keep in mind we had two years of double digit price increases in 2006, and 2007, so coming down from that doesn’t mean much. A 10% decrease on $500K is $50K. That sounds like a lot in marketing hype, but the reality is that it is only 10%.

    I don’t think we’ve begun to see that 30%, let alone talk about real present value.

  16. 16

    By David Losh @ 15:

    Next, is that we work with a great Real Estate agent who lists properties 10% below Fair Market Value, of the CMA, and his listings sell, readily.

    LOL. Sounds like my offer here to sell at a reduced commission if someone wants to list their non-distressed property at distressed prices. Of course they sell! Unfortunately, they’re giving up 10% to do it, but under my proposal they’d be required to give up something more like 20%. Sounds like a hell of a deal! ;-)

  17. 17

    By David Losh @ 15:

    I don’t see the 30% pricing drop in properties listed for sale. I’ll look at solds next week end. . .

    You’re looking at list prices on active listings? You wasted your time. Why didn’t you look at sold prices in the first place? I thought you understood real estate!

  18. 18
    Scotsman says:

    Nice 5 minute summary- watch the vid, read the comments. No bottom yet. Sorry, Ardell.

    http://finance.yahoo.com/blogs/daily-ticker/home-prices-fall-2003-levels-housing-hit-bottom-134407799.html

  19. 19

    RE: Scotsman @ 18

    The Controversial 4 Hours Ago Video You Referenced is Apparently “No Longer Available” on Yahoo

    And they errantly call MSM free press…LOL

  20. 20
    CCG says:

    Must be good to be a lawyer/bureaucrat in DC. Uncle Thug is in a bull market that will never end until he finally takes the country down with him.

  21. 21
    David Losh says:

    RE: Kary L. Krismer @ 17

    Oh, for gawd sakes, it’s really hard to follow your reasoning at all. Looking at solds is the past. People pay an exorbitant amount of money for property. One I’m tracking now will be a $100K loss to the very recent buyer.

    In November December you see real market value. This is when you get the price reductions people wouldn’t give up in September. The solds hit in October, and reality sets in. The seller can remove the property until next Spring or reduce. Some of those reductions are for lateral move buyers who bought in July, or August then sold.

    I mean really.

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.