Case-Shiller: Seattle Home Prices Still Falling

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

Down 1.0% September to October.
Down 6.2% YOY.
Down 30.2% from the July 2007 peak

Last year prices fell 1.3% from September to October and year-over-year prices were down 4.1%.

No big surprise here. Expect continued declines through the fall and winter months at least.

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):

Again, DC and Detroit are 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 moved from close to the bottom of the heap in month-over-month changes to the middle this month, while Atlanta continues to plummet.

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

  • Detroit at +2.5%
  • Washington, DC at +1.3%
  • Dallas at -0.6%
  • Denver at -0.9%
  • Boston at -1.1%
  • Charlotte at -1.2%
  • New York at -2.0%
  • Cleveland at -2.4%
  • Miami at -4.0%
  • San Diego at -4.5%
  • San Francisco at -4.7%
  • Portland at -4.7%
  • Chicago at -4.8%
  • Los Angeles at -4.9%
  • Phoenix at -5.1%
  • Tampa at -6.1%

Just three cities were falling faster than Seattle as of Octboer: Minneapolis, Las Vegas, and Atlanta.

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

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-one months since the price peak in Seattle prices have declined 30.2%, a bit lower than last month, but still up 0.7 points above the low set back in February.

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, Portland, and Seattle all bumped up a bit in October, but Los Angeles continued to fall. Year-over-year, Portland came in at -4.7%, Los Angeles at -4.9%, and San Diego at -4.5%.

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, 12.27.2011)

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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.

79 comments:

  1. 1
    MacroInvestor says:

    This is September to October data. While the median is more volatile (and has other issues), the direction is significant. The next 2 Case-Shiller data points looks to be worse than this one. Buckle up for a cold winter in real estate.

  2. 2
    ARDELL says:

    Question. Why does the HPI % chart appear as if “Seattle” peaked in 2004-2005? Clearly that is not the case. What am I “missing”?

  3. 3
    The Tim says:

    RE: ARDELL @ 2 – Because that is when the year-over-year change peaked, at +18.5% YoY in December 2005.

  4. 4
    Dave0 says:

    RE: ARDELL @ 2 – Don’t get confused by the last graph, the labels at the top apply to LA & San Diego, while the labels at the bottom apply to Seattle & Portland.

  5. 5
    John Wendl says:

    It’s surprising to me that over the past 5-10 years there have been massive regional differences in values but for the past 6 months all locales are in a much tighter range. Is that the effect of government intervention or some other force at play?

  6. 6
    ARDELL says:

    RE: The Tim @ 3

    That doesn’t match the market I see. The biggest YOY change was later than that.

    http://www.realtown.com/Ardell/blog/tracking-the-market/redmond-wa-home-prices-education-hill

    That’s a small segment, but given my years of tracking, fairly relevant to most prime Eastside and Seattle Areas.

    I think calling Pierce, King and Snohomish “SEATTLE” is a bit misleading. Why not call it PKS or 3-County. I understand why Case Schiller might consider it to be “Seattle”, but most locals would not.

  7. 7
    Dave0 says:

    RE: ARDELL @ 6 – Case Shiller uses King, Pierce, and Snohomish counties to capture an overall look at the metro area, and because the US Census Bureau defines the Seattle Metro Area as these three counties. True, most locals wouldn’t refer to this as “Seattle” when talking to other locals, but when you are traveling in Flordia, and someone asks where you are from, are you going to say “Bothell?” No, because that would just cause a confused look on their face; you are going to say “Seattle.”

    Of course, you could look deeper at smaller segments of the Seattle Metro Area and get different results from Case-Shiller, but Case-Shiller provides a good, macro-level measurement for metro areas on a national scale.

  8. 8
    Jonness says:

    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.

    House prices are driven more by macro-factors than local factors. First comes the macro picture that sets the overall scene, and within this, the local neighborhoods divvy up the left overs. All communities have pockets of strength and weakness. Some hold up better than others, but all prices are relative to what the national trendline allows. One community’s economics do not exist in a vacuum completely separate from the rest of the nation.

    IOW, the charts are moving in unison. And while Seattle’s correction was disrupted by insane government policies, the very fact that these policies were developed by insane people means, the necessary Seattle house price correction was only delayed. Thus, prices will continue to fall, and we will most likely reach a new post-peak low during the 2012 winter doldrums.

  9. 9
    Jonness says:

    By ARDELL @ 6:

    That doesn’t match the market I see. The biggest YOY change was later than that.

    Tim’s chart shows the YOY Seattle metro area peaking in late 2005/early 2006. Your Abbey Road chart peaks in 2005. They appear to be in agreement to me.

    Your single neighborhood chart is interesting and does a great job of demonstrating my point about macro-factors influencing price. While being a pocket of neighborhood-specific relative strength in the Seattle metro area, Abbey Road is closely tracking what the macro factors allow. It is not appreciating or depreciating in a vacuum that is disconnected from the rest of the country.

  10. 10

    By Jonness @ 8:

    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.

    House prices are driven more by macro-factors than local factors.

    That’s largely true now, but it’s not always been true. In the past certain parts of the country have had downturns in their overall economic activity, while others didn’t.

  11. 11
    JGBellHimself says:

    Dear TT, aka Totally (wrong) Tim;

    While we do like to see that you are continuing to whine about “the interference” by government in the free (is that not a joke?) fall of prices, we are getting tired of it, a wee bit.

    Bcuz, you see, but apparently not, that between Jan and July in we-ought-not-go-there 08 the non-agency Wall Street investment banksters stopped providing U.S. with half of our RE loans, and in July – when China stopped buying US$ 35 Billion a MONTH of FMae&FMac the other half of ALL available RE lending also disappeared.

    There was, strangely, a huge inventory of newly built homes that were NOT selling, in part due to there being NO mortgage moneys available.

    So, to “bail out” both home builders and you RE people, the Government provided an incentive for some of U.S. to buy up those very public inventory of newly constructed homes.

    Even more oddly, we did it. Even though prices did, a wee bit later, fall some more.

    And, according to you, very sadly, the free fall also stopped.

    What would have happened if it had not. That you do not care, or think about. Giving ANY “credit” (no pun intended) to The Government for stopping the free fall is, of course, what you believe is true. Bcuz, you see no proof, that satisfies you.

    If the lack of proof of what stopped the free fall does not satisfy you TT, the continuation of that collapse would have not satisfied you even more.

    But, as Sherlock suggests, the fact that the dog did not bark, is irrelevant…
    is it not.

  12. 12
    tomtom says:

    By ARDELL @ 6:

    RE: The Tim @ 3

    That doesn’t match the market I see.

    That’s because you’re only looking at a small subset of the market that Case-Shiller is using.

    And Redmond isn’t Seattle.

  13. 13

    By JGBellHimself @ 11:

    There was, strangely, a huge inventory of newly built homes that were NOT selling, in part due to there being NO mortgage moneys available..

    At what point in time were mortgage funds unavailable? Are you relying on press reports? Freddie and Fannie kept the funds flowing nicely, without interruption.

  14. 14
    Scotsman says:

    RE: JGBellHimself @ 11

    Do you really think that the government has done anything except delay the inevitable? Are you one of those “we’re going to grow our way out of this” guys?

    So what you’re saying is- this time is different- we won’t return to the trend?

  15. 15
    David Losh says:

    RE: JGBellHimself @ 11

    This is another excellent point. The difference that I see is that we were in a global free fall of financial markets that stopped funding risk. In my opinion there was a shift to safer returns.

    I agree about the new construction market and am shocked that inventory got absorbed as much as it did. In Nevada, and Arizona, it appears, there was some blood letting, but now those things are on the rise. To me it is incredible.

    I would also say that just because the government gave an incentive doesn’t change the fact people paid way to much for property. I don’t get it, it makes no sense. We were in a time of falling prices, but the government waves some money around, and people start bidding up prices, and that hasn’t stopped!

    It’s incredible.

  16. 16
    HappyRenter says:

    By David Losh @ 15:

    RE: JGBellHimself @ 11
    I would also say that just because the government gave an incentive doesn’t change the fact people paid way to much for property. I don’t get it, it makes no sense. We were in a time of falling prices, but the government waves some money around, and people start bidding up prices, and that hasn’t stopped!

    When people see money they stop thinking. I know examples where people have bought a house JUST BECAUSE of the 8000$ incentive and I know they should have not done it. “FREE MONEY! LET’S GRAB IT!” A euphoria that leads to more problems later. Basing your home buying decision solely on the fact that you will be receiving free money is not a well conceived step, and I am sure that a lot of people (not everybody) did it because of that, and the government seems to have encouraged it.

  17. 17
    Azucar says:

    By JGBellHimself @ 11:

    Dear TT, aka Totally (wrong) Tim;

    While we do like to see that you are continuing to whine about “the interference” by government in the free (is that not a joke?) fall of prices, we are getting tired of it, a wee bit.

    Please, speak for yourself. Unless by “we” you mean you have a mouse in your pocket and you’re speaking for him and yourself. But you have the tone of someone who thinks they’re a lot smarter than they really are, and I don’t like it when people like that try to imply that they’re speaking on my behalf.

  18. 18
    ARDELL says:

    RE: tomtom @ 12

    I think we should have a “What is ‘Seattle’ to you”? poll. Redmond is more “Seattle” to me than Fife in Pierce County.

    That is a small subset, I agree. But most of Queen Anne and similar neighborhoods in Seattle and Bellevue and Kirkland would better match that small subset than Pierce, King and Snohomish stats on a combined basis.

  19. 19
    ARDELL says:

    I have a request for another poll, maybe Tim has already done one. “Where would you live in The Seattle Area if money were no object?”

  20. 20
    Scotsman says:

    RE: ARDELL @ 19

    “Where would you live in The Seattle Area if money were no object?”

    Santa Barbara- when I wasn’t on the ranch in western Montana? I could still call myself a “Seattlite.”

    Remond is nothing like Seattle. Woodinville even less so. I would guess the majority of folks living in those areas go to Seattle maybe once a month. They probably self identify more with Spokane. They have horses there. Well, at least more than they do in Seattle.

  21. 21
    Scotsman says:

    Why are home prices still falling? Sixty three percent of Americans are most worried about:

    economic collapse.

    http://www.ecohealthalliance.org/sup/downloads/EcoHealth%20Alliance%20Survey.pdf

  22. 22
    ARDELL says:

    RE: Scotsman @ 20

    Interesting perspective. Lots of homes in Kirkland have a good view of the Seattle skyline including the Space Needle and fireworks. It feels “right there” to me. Back to the question. Isn’t Redmond more “Seattle Area” than Fife in Pierce County?

    Would anyone buying or selling real estate here mention Pierce, King and Snohomish all in one breath like they are one destination point if there were no Case Shiller doing that?

  23. 23
    Scotsman says:

    RE: ARDELL @ 22

    I’ll agree CS misses some of the larger picture by lumping the three counties together in terms of pricing. But no more so than those who think relative proximity means similarity. Is Denny Blaine or Broadmoor like Capitol Hill? Magnolia like South Park?

    Woodinville and Redmond are more country than urban- sure, not every house has a pasture, but that’s the vibe. CS is right to look at the whole as a unit- diverse, but still a metro grouping.

  24. 24
    Hugh Dominic says:

    By ARDELL @ 22:

    RE: Scotsman @ 20

    Interesting perspective. Lots of homes in Kirkland have a good view of the Seattle skyline including the Space Needle and fireworks. It feels “right there” to me. Back to the question. Isn’t Redmond more “Seattle Area” than Fife in Pierce County?

    Would anyone buying or selling real estate here mention Pierce, King and Snohomish all in one breath like they are one destination point if there were no Case Shiller doing that?

    I have an idea. Why don’t we identify all the upscale neighborhoods in the area, and call them Seattle? And we can call all the crappy ones Tacoma! Or if we select our data carefully enough, we can define Seattle as any neighborhood that is appreciating, then publish a headline that Seattle prices are rising!

  25. 25
    The Tim says:

    By ARDELL @ 19:

    I have a request for another poll, maybe Tim has already done one. “Where would you live in The Seattle Area if money were no object?”

    Actually I did run a poll that was basically that question, back in January 2008: Poll: You win a free home anywhere in the Puget Sound area. Where do you choose?

    With 477 total voters, the runaway winner was “North Seattle (Queen Anne, Magnolia, Ballard, etc.)” with 34%, 164 Votes. Second place was “Mercer Island or on Lake Washington” with 18%, 88 Votes. A close third was “Eastside (Bellevue, Kirkland, Redmond, etc.)” with 18%, 85 Votes.

    “Downtown Seattle” had 11%, 54 Votes and all the other choices had less than 5% of the vote.

  26. 26
    ARDELL says:

    RE: Scotsman @ 23

    I would not agree as to Redmond being anything like Woodinville. Have you been to Redmond lately?

  27. 27
    ChrisM says:

    RE: JGBellHimself @ 11 – May I nominate your post as the most insightful in, oh, at least a year? Also interesting to see who responds to your post.

  28. 28
    ARDELL says:

    RE: Hugh Dominic @ 24

    Why don’t we just do our best to get to the truth of the matter instead? Wouldn’t that be better? Instead of pretending there is no disparity?

    When the disparity is as great as this within one County…let alone three Counties

    http://www.realtown.com/Ardell/blog/tracking-the-market/redmond-2011-home-prices

    why pretend there is some mid point between the two that is relevant to anyone in either place?

    When one area has 47% REOs and the other 8%, how is it helpful to insinuate that foreclosures are evenly spread throughout the three counties, or that prices are equally down from peak across the board?

    There may be a few people who are willing to buy anywhere in the three Counties, but by and large real estate does not function that way. To pretend it does just confuses people, and the internet is supposed to enlighten…not confuse.

  29. 29
    ARDELL says:

    P.S. On a darker note…there is no safe haven for condos. If you want to explore the underbelly of the market, there are much steeper declines in condos than single family homes in even the best of areas “North of I-90”. If you want to paint the “Seattle Area” in dark tones, go for the condos. That would make more sense than trying to lump in Pierce County.

  30. 30
    Jonness says:

    By Kary L. Krismer @ 10:

    That’s largely true now, but it’s not always been true. In the past certain parts of the country have had downturns in their overall economic activity, while others didn’t.

    That is a great point. Things like the S&L crisis have hit certain parts of the country harder than others or have greatly affected one area with little to no effect on others.

    I think we even see the same thing to some degree in the current crisis. Some of the states saw very little price appreciation during the bubble runup years and have retained fairly stable unemployment rates throughout. These areas are currently holding out, price-wise, much better than areas where prices ran up much higher than historical relationships to rents and incomes. I’m not certain about all these areas, but I read about a few of them where bankers were more conservative with lending guidelines. But I don’t profess to know the exact reasons why all of these states have remained fairly immune to the housing bubble and subsequent recession.

  31. 31
    Jonness says:

    By ARDELL @ 18:

    That is a small subset, I agree. But most of Queen Anne and similar neighborhoods in Seattle and Bellevue and Kirkland would better match that small subset than Pierce, King and Snohomish stats on a combined basis.

    Ardell, I am uncertain why you often point out that better neighborhoods have declined at a slower rate than poorer neighborhoods (whether in Seattle, Vegas, Detroit, etc). Even the coveted area you linked has lost a heck of a lot of value since the peak.

    The risks associated with buying in to a collapsing market are far greater than the risks associated with waiting for legitimate signs of stabilization prior to buying. If you buy into a better neighborhood and only lose $100K while the guy 5 miles away loses $250K, you still lost $100K.

    I can sell you a used car that breaks down after 50 miles and needs a $5000 repair, or I can sell you one that breaks down after 40 miles and needs a $10000 repair. Either way, you shouldn’t have bought the car.

  32. 32
    Scotsman says:

    RE: ChrisM @ 27RE: JGBellHimself @ 11

    Post of the year? Let’s see- well written, sort of clever, and just the right amount of snark. Too bad it’s generally inaccurate and wouldn’t stand up to 5 minutes of fact checking. But hey, this is the internet so put it out there and see if someone bites. I mean someone besides “the government and/or real estate is my meal ticket” crowd.

  33. 33
    wreckingbull says:

    RE: Scotsman @ 32 – One could sell those excess commas for a tidy profit. I’d then use the proceeds to buy Pfft some capital letters. I find that pneumatic prose does nothing more than obscure the message.

  34. 34

    By ARDELL @ 18:

    RE: tomtom @ 12

    I think we should have a “What is ‘Seattle’ to you”? poll. Redmond is more “Seattle” to me than Fife in Pierce County.

    That is a small subset, I agree. But most of Queen Anne and similar neighborhoods in Seattle and Bellevue and Kirkland would better match that small subset than Pierce, King and Snohomish stats on a combined basis.

    Technically, Seattle isn’t even Seattle, since I’m fairly sure the NWMLS figures for Seattle include some unincorporated King County (parts of Skyway).

  35. 35

    By Scotsman @ 21:

    Why are home prices still falling? Sixty three percent of Americans are most worried about:

    economic collapse.

    http://www.ecohealthalliance.org/sup/downloads/EcoHealth%20Alliance%20Survey.pdf

    I would tend to agree, but I would note that calls into question those relying on economic data for their predictions. What people do or don’t do is often not based on reality, but instead perception.

    I’ve addressed that in the past discussing consumer confidence, or how lower income people in late 2007, early 2008 thought mortgage financing had dried up based on news reports.

  36. 36

    By Hugh Dominic @ 24:

    I have an idea. Why don’t we identify all the upscale neighborhoods in the area, and call them Seattle? And we can call all the crappy ones Tacoma! Or if we select our data carefully enough, we can define Seattle as any neighborhood that is appreciating, then publish a headline that Seattle prices are rising!

    That’s today’s piece, on the performance of the different tiers.

    BTW, I find it a bit amusing how some have just discovered that C-S covers too large of an area. If only I’d thought of that before. /sarc

  37. 37

    By ARDELL @ 19:

    I have a request for another poll, maybe Tim has already done one. “Where would you live in The Seattle Area if money were no object?”

    I already live there. I was just commenting to my wife this week that we haven’t been going to my mom’s lake place since we bought our new place. Before then, living on a moderately busy street within the city limits of Seattle, the lake was a very nice get away. Now it’s just trading looking at a forest across a golf course for looking at a forest across a lake. One is just as relaxing as the other.

    But again, I think people are better off looking at as wide of an area as possible. When you limit yourself to a smaller area, you really do limit yourself.

  38. 38

    Jonness said:
    “Ardell, I am uncertain why you often point out that better neighborhoods have declined at a slower rate than poorer neighborhoods (whether in Seattle, Vegas, Detroit, etc).”

    I’m sure it’s just a coincidence that those happen to be the neighborhoods she sells real estate in. You poor, poor people living south of I-90. How can you look at yourselves in the mirror each morning, knowing that you’re destined to face a bleak future of housing price declines?

  39. 39

    RE: Ira Sacharoff @ 38 – LOL. It really is a burden living south of I-90, and you should just be thankful that the government does anything for you!

    Seriously, I did find it a bit shocking moving to Skyway how that area is treated. My favorite example is that the I-5/Boeing Access Road interchange didn’t have a full interchange with I-5 until about 2000. Of course, the engineering work on that southbound exit to BAR must of been especially challenging. And the north bound on-ramp was even more complex, because it involved a curve!

  40. 40
    Blurtman says:

    Counterpoint: They are building like mad in Sammamish. Four new developments underway off of 212th, including million dollar mega mansions. How many of these can Microsoft support? What gives? Even a years dormant aborted new build on E. Lake Sammamish is now being finished. Green shoots?

  41. 41

    RE: Kary L. Krismer @ 39
    How Skyway is treated is more of an unincorporated KC thing rather than a south of I-90 thing.
    I was on the West Hill ( Skyway) community council for a while, until my house got annexed to Renton. The county wants to divest itself of the urban unincorporated areas, especially those that are noted for poverty and crime, such as Skyway and White Center. Both of those areas are far nicer than their reputations, but are lacking in things that a government ought to provide, like streetlights and sidewalks.

  42. 42

    RE: Ira Sacharoff @ 41 – I don’t know how that fits with the interchange I mentioned. Perhaps it’s just that road improvements follow me! After I moved to Fairwood they greatly improved both the I-405/169 interchange and I-405 south of that interchange.

    Back on Skyway, that once ratty apartment across from the store on 51st, my understanding was that the store owner had better response with the drug dealing from King County than he did from Seattle police. Unfortunately the apartment was in Seattle and he was in unincorporated King.

    BTW, apparently some of that future incorporation might be put on hold because the state to balance its budget may quit giving away funds to the cities that take those areas. That was in the paper about a week ago.

  43. 43
    ARDELL says:

    RE: Jonness @ 31

    I fully support the concept that we should be building toward a better day when the average buyer or seller of a home does not need to rely on a middle man to the extent that they have in the past.

    To get there we have to move into the realm of reality instead of one camp being about abstinence and “Just Say No” and the other saying “It’s a great time to buy! Just DO it!”

    From August 1 2007 to March 2009 there was no need to break out the headlines, as all markets were sliding. Not to the same degree, but sliding in the same direction.

    After that we have seen many markets having corrected. Primarily those with fewer foreclosures running at 15% (when you add in pre-foreclosures) or less on any given day and as low as 8% of homes actually foreclosing. That market has stayed relatively flat for 3 years except for normal seasonal variance. To combine that information with areas that are 47% foreclosures plus 11% pre-foreclosures, only 42% “regular” sales vs 87% “regular” sales, just becomes mis-reporting to say the market is DOWN. If that is only true on a combined basis, vs true for all as in 2008, then that headline is misreporting. (For the record…I don’t call .0000713% down, “down”).

    At the end of the day it isn’t about buy or don’t buy…it’s about arming people with accurate information that they can use in their frame of reference, so that some day agents will not be needed at all.

    To that end, no one’s “frame of reference” is “Pierce, King and Snohomish Counties on a combined basis”. How can you even look at the headline of this post and say it is “true”? Does any local call Pierce, King and Snohomish Counties “Seattle”? It’s a Tri-County Area…not “Seattle”, and to say otherwise in a headline is simply mis-reporting.

    You ask why I often point out X vs Y. Because that is the real estate world I am expert at. My hope would be for all people with access to data, plus an experience level in their market, to report similarly. My wish is for all buyers and sellers of homes to have accurate info, in their frame of reference, until their need to rely on agents becomes less and less and possibly an hour “consult” session a couple of times during the home buying or selling process.

    If Kary would do what I do in his area of Kent and surrounds, and David would do what I do in his areas of Capitol Hill and surrounds, and Ira would do what I do in his area of Skyway and surrounds…so forth and so on…people would have more relevant information. If SB, now that Tim has access to mls data specific, would do break outs of the actual “markets” without bias. If all of those things would happen…more people would be moving toward getting good area specific info via the internet vs needing an agent.

    Isn’t that the end goal? Or is it to sensationalize headlines just to get “more readers”. Does reporting in “Case Shiller Tiers” really help anyone with their today objective of making a decision on a given home? In all of Lake Washington School District, a pretty large area and not “Redmond” specific, 75% of all homes sold, sell between $300,000 and $775,000. The median has been flat for three years running between $500,000 and $525,000. That is “a market”.

    How does County-wide or Case Shiller 3-County data help those people buying and selling homes move toward not needing an agent? I’m not saying don’t report the data…but how about reporting which areas are outperforming or underperforming that data, instead of falsely saying “Seattle Down” and meaning “Tri-County Area Down”?

    Peak was 5 years ago. Continuing to reference “from peak” is starting to sound like the agents who 5 years ago were talking about the days of double digit interest rates. Today’s home buyer or seller should not even be looking at peak. NO buyer or seller, in any market, should be talking about “prices 5 years ago were…”, except maybe Grandpa sitting in his rocking chair on the porch.

  44. 44
    David Losh says:

    RE: ARDELL @ 43

    I look at all market places for the simple fact that it is predictive. Kary is the one who always says you can’t predict Real Estate, but has a commnet about the Boeing Assess Road.

    I can predict that the day a developer starts building, starts developing, or a Wal Mart goes in, property prices will rise in that area. I happen to like that area, and Renton.

    You have to look at what is going on South of I-90 the same as I need to look at South Snohomish, or Columbia City. Buyers always have an alternative choice.

    You know that.

    We have a comment here about Sammamish, do you look there? How about development of new office space for Amazon? Do you look at that? I’ve looked at San Diego, Las Vegas, and now Miami to see what blood letting looks like.

    I don’t like Case Schiller, but it is what people are looking at, so I say that we get with that program, and deal with it.

  45. 45
    Sweet Pea says:

    By Blurtman @ 40:

    Counterpoint: They are building like mad in Sammamish. Four new developments underway off of 212th, including million dollar mega mansions. How many of these can Microsoft support? What gives? Even a years dormant aborted new build on E. Lake Sammamish is now being finished. Green shoots?

    I’ve been trying to figure this out myself. More building along Duthie Hill Rd, even though a mini-development adjacent is still ~25% unsold with crapboxes priced just under $500K. More building in Issaquah Highlands – townhomes, across the street from for-sale signs on condos/townhomes that have sat for months.

    More density just approved near downtown Issaquah, even though the Highlands are still unfinished, and offer negligible “density” employment as it is. I must be too “dense” to understand the thought processes behind these decisions.

    http://seattletimes.nwsource.com/html/localnews/2017100680_issaquah27m.html

  46. 46

    RE: ARDELL @ 43
    Ardell said “If Kary would do what I do in his area of Kent and surrounds, and David would do what I do in his areas of Capitol Hill and surrounds, and Ira would do what I do in his area of Skyway and surrounds…so forth and so on…people would have more relevant information.”
    I agree that sharing information is a wonderful thing, but some big assumptions are being made here. One is that all I do is sell real estate in Skyway. I live near Skyway and know the area well, but in recent times I’ve represented people buying houses in Bothell, Wedgwood, North Beacon Hill, and the Top of Queen Anne .I’ve only done one deal in the Skyway zip code. It’s inaccurate and misleading information to imply that I am a “Skyway” specialist or that Kary is a “Kent” specialist, but that Ardell is the expert in all things north of I-90

  47. 47

    RE: Ira Sacharoff @ 46 – Correct. I think we only had three listings in Skyway when I lived there, not counting my own. And we had a lot of activity in Kent before moving from Skyway to Fairwood. Not sure why.

    Somewhat related, I have done a couple of pieces on how much prices have declined in certain areas, including Skyway, Kent and two east-side areas. Here is a link to the most recent:

    http://www.trulia.com/blog/kary_l_krismer/2011/11/how_much_have_prices_really_declined–an_update

  48. 48
    HappyRenter says:

    Apropos Redmond. How is real estate in Redmond? Is it cheaper than the more desirable places of Seattle like NE Seattle?

  49. 49
    ARDELL says:

    RE: David Losh @ 44

    I absolutely agree about “alternative choice” and it is spot on that “alternative choice” equals “a market”. Whether or not “the market” is up or down must include the study of “alternative choice” areas. However, I’m sure you will agree that for most people, combining Pierce, King and Snohomish Counties does not represent a market of “alternative choices”.

    Buyers en masse or at least in majority determine what “a market” is and isn’t. People will want 98033 but buy in 98052 if it is more affordable. Buyer’s determine that those are alternative choices in one market vs two separate markets. People may want Kirkland, but buy in Bothell 98011 (vs 98012 or 98021) because they can get more for their money. That makes parts of Bothell part of the Kirkland “market”.

    Same with Queen Anne, Madrona and Capitol Hill. Often people will include those as one market and be equally willing to live in any of the above. Several other neighborhoods fit into that “market”. What makes “a market” is “alternative choice”, as you say and are absolutely correct. But that doesn’t make the study of Fife in Pierce County a necessity of valuing property in Queen Anne. All markets are not interdependent, and to keep pretending that Case Shiller is “Seattle” or “a market” at all…well, it’s really gone on too long, as we all know it isn’t true.

    When no buyer, or let’s at least say a very rare buyer, would choose between Downtown Kirkland and Skyway or Downtown Kirkland and Federal Way…then those are two different markets, as what happens in one does not influence another.

    If Federal Way has only 42% regular sales, that fact will impact “alternative choices” to Federal Way. But to lump in the 87% regular sale areas as if they are “lagging markets” is just misleading.

    The short of that is “No, Ray. They are not ALL coming back.” :) What happens in Federal Way does not find its way eventually, to other non-alternative choice areas.

  50. 50
    ARDELL says:

    RE: HappyRenter @ 48

    It’s hard to answer that, as Northeast Seattle has many homes built prior to 1950 and Redmond has virtually none. Redmond wasn’t really developed until the 520 Bridge went in in the early 60’s. Also Redmond has about the largest inventory of moderately priced New Construction homes built in housing developments since 2003 or so, and Northeast Seattle has virtually none built as developments, and few built at all.

    One of the only styles I can compare apples to apples in Redmond and Northeast Seattle is a split entry, and on that basis the values are about the same for that style of home.

    When you move to a newer home built since 2003 costing $650,000 or less, Northeast Seattle only had 20 of those sold (not including townhomes) while Redmond close-in (98052 vs 98053) had 85 of those sold, using a 365 day rolling basis.

    So if someone is looking for a newer single family home, it wouldn’t necessarily be a comparison of price.Redmond has at least 4X as many of those as Northeast Seattle.

    For a clearer comparison I’d need you to define “NE Seattle” a little better, as in zip code. But that’s the broad answer.

    As of today we have to adjust due to Bridge Tolls as well. :) Living “on your side of the Bridge” became more important today. At $7 to $10 a day to “get to work” and home again, the cost of living on the other side of the bridge from work, just went up.

  51. 51
    ARDELL says:

    RE: Ira Sacharoff @ 46

    I’ve represented people in Edmonds and Des Moines…but that does not make me “expert” at those areas. Every agent has, or should have, an area of expertise that they know like the back of their hand…not merely that they sold a home in once or twice. I just did two in Mountlake Terrace and will shortly be doing one in…drumroll please…Lakeridge! :) Yes folks, that is South of I-90.

    But real estate has always required an agent to study one area intensely the same way that a Stock Analyst will know lots about the market…but everything about a single field of expertise like Tech Stocks or Oil Stocks.

    The day agents started answering “Where is your service area?” with “Anywhere!”…is the day we began pulling the middleman out of the transaction.

    My point isn’t that you only do the one area that I named as example. My point is that if you wrote about your area of expertise (whatever that may be) and 50 other agents all did the same, complete with real data, buyers and sellers would have more information available on the internet. Enough information at their fingertips, to better do some, and even many and most, things on their own and well, without having to pay many of thousands of dollars ad nauseum in real estate commissions.

    3 County info is great and useful for something…but without area specific data, it is not nearly enough for the average home buyer or home seller to use in a relevant way when buying or selling a home.

  52. 52
    ARDELL says:

    RE: David Losh @ 44

    I did sell a house in Sammamish, as in helped a buyer move to Redmond from Sammamish, earlier this year. I represented them as the buyer in Redmond and the seller in Sammamish. I feel the same way about most of Sammamish as I do about most of 98053. Generally it’s an “alternative choice” market.

    The school district line runs through it, with Lake Washington on one side and Issaquah SD on the other. The monster Buchan development priced at $1M plus is on the Issaquah side and the moderately priced Murray Franklin’s a stone’s throw away are in Lake Washington School District.

    Both are good School Districts, but I’d have to say I favor the “closer in” areas as to what will better maintain value over the long term. The current draw of Sammamish and 98053 is “new” as the builders have moved further out where they can get more land. Chasing new construction wherever it may go…well…anyone remember what happened in Lake Stevens, Monroe and Duval when the people chased the builders there?

    To my clients I ask “Would you chose to live right here if there were no new homes here?” If that answer is no, then that tells you something about the value of your new home, when it becomes a resale home. Even you wouldn’t buy it.

  53. 53
    David Losh says:

    RE: ARDELL @ 51RE: ARDELL @ 50RE: ARDELL @ 49

    The first time I saw a house in Ballard for $225K I was horrified. It was being painted this god awful blue color outside, and white inside. The house was about to go on the market, and I was asked for a price opinion.

    Ballard had yet to be a place to be. Then they filled the place up with town houses. Yikes!

    Don’t get me started on Columbia City, and West Seattle. Redmond completely escapes me as does Kirkland. As far away as Federal Way is for you some people call it a reverse commute. I would pay more for a place in Renton than Bellevue, or what they call Sammamish.

    And as far as Tacoma goes, it is a major Port, and job center.

    Case Schiller is meant to be a National Index. It goes along with the ETrade way of thinking about property. You are just trying to muddy the water of the internet Real Estate business model, and claim Real Estate agents have more localized knowledge.

    I’m surprised you aren’t getting more thumb down action for such sacrilege.

  54. 54

    By ARDELL @ 49:

    I absolutely agree about “alternative choice” and it is spot on that “alternative choice” equals “a market”. Whether or not “the market” is up or down must include the study of “alternative choice” areas. However, I’m sure you will agree that for most people, combining Pierce, King and Snohomish Counties does not represent a market of “alternative choices”.

    Even if you limit it to a smaller area, it still doesn’t account for the difference in style of house. Someone willing to tolerate a 1 or 1.5 bathroom home will have seen much larger price declines than someone looking for a 2+ bathroom home. You could do the same thing with different size houses or different style houses. And as you’ve mentioned, condos are an entirely different ballgame.

  55. 55

    By ARDELL @ 50:

    As of today we have to adjust due to Bridge Tolls as well. :) Living “on your side of the Bridge” became more important today. At $7 to $10 a day to “get to work” and home again, the cost of living on the other side of the bridge from work, just went up.

    It will be interesting to see how that affects the Kirkland area. Or indirectly, Kenmore (now Trafficmore).

  56. 56

    By ARDELL @ 51:

    <Every agent has, or should have, an area of expertise that they know like the back of their hand…not merely that they sold a home in once or twice.

    While there are advantages to knowing local issues (e.g. it’s better to be north of X Avenue), it can also be a disadvantage. Agents not as familiar with an area might spot a new trend earlier.

    It’s sort of like walking into a building. If you walk into a building every day you’re less likely to notice the carpet getting dirty than if you just walk into the building for the first time.

  57. 57
    The Tim says:

    By Kary L. Krismer @ 55:

    It will be interesting to see how that affects the Kirkland area. Or indirectly, Kenmore (now Trafficmore).

    I’m certainly glad I’m not living in Kenmore anymore. I think the state’s models of how many people will head north to avoid the toll were low. 522 / Bothell Way is going to be even more nasty than it already was.

  58. 58

    RE: The Tim @ 57 – And a lot of that extra traffic undoubtedly consists of sex offenders!

  59. 59
    Jonness says:

    By ARDELL @ 43:

    Today’s home buyer or seller should not even be looking at peak. NO buyer or seller, in any market, should be talking about “prices 5 years ago were…”

    I agree to some extent. Instead of only looking 5 years back, they should be looking 10. This way, they know how much they risk to lose if they buy now instead of continuing to save a down payment and waiting to buy in a few more years.

    Buyers need to pay attention to the historical ratio between median household incomes and median house prices or they are driving with their blindfolds on while they make the biggest financial decision of their lifetimes.

    Those who don’t study history are doomed to repeat the mistakes of the 40% (when including selling fees) of Seattle-area house buyers whose homes are now worth less than they paid for them.

  60. 60
    Jonness says:

    By ARDELL @ 49:

    The short of that is “No, Ray. They are not ALL coming back.” :)

    Didn’t you also claim back in 2007 that Seattle was special; thus, prices would not decline there? Now it’s changed to, Seattle is special because special areas like Education Hill have only lost 18% since 2007 (when using non-same sales data). And we should just forget what happened 5 years ago because it’s old fashioned.

    What happens in Federal Way does not find its way eventually, to other non-alternative choice areas.

    BS! Everything is interconnected. Falling prices in one neighborhood put downward pressure on prices in the adjacent neighborhood. If this were not true, prices near Education Hill would not have declined since 2007.

    So let’s check out this highly special “Education Hill” area you keep using as proof of the “special immune neighborhoods” theory.

    http://www.redfin.com/WA/Redmond/9580-166th-Ave-NE-98052/home/325552

    Ouch! Sold for $340,500 in 2005. It probably was valued at $650,000 in 2007. But it is currently listed at $269,900 and rotting on the market. Not bad. That’s only about a 60% drop in price from what it would have sold for in 2007.

    Ray is right. They are all coming back!

  61. 61
    The Tim says:

    By Jonness @ 60:

    So let’s check out this highly special “Education Hill” area you keep using as proof of the “special immune neighborhoods” theory.

    http://www.redfin.com/WA/Redmond/9580-166th-Ave-NE-98052/home/325552

    Ouch! Sold for $340,500 in 2005. It probably was valued at $650,000 in 2007. But it is currently listed at $269,900 and rotting on the market. Not bad. That’s only about a 60% drop in price from what it would have sold for in 2007.

    Yow, and two foreclosures since 2008! Some sucker bought it at the foreclosure auction for $308,000 04/18/2008 and immediately tried to flip it for $130,000 more, putting it on the market a mere 5 days later. Of course, nobody fell for it, and that buyer just ended up being foreclosed on this past August.

    All right in the heart of the precious Education Hill. Impossible!

  62. 62
    Scotsman says:

    RE: The Tim @ 61

    Education Hill? That was most likely an expensive education.

  63. 63
    ARDELL says:

    RE: The Tim @ 61

    Oh please…talk about grasping at straws to be negative. That thing is barely “a house”. 1 bathroom? Functionally obsolete. Let’s go find a mobile home in Redmond and kick that around next…

    http://www.redfin.com/WA/Redmond/9580-166th-Ave-NE-98052/home/325552

    That one is 75% lot value with the Assessor taxing the house as only 25% of the total value. It’s almost a teardown.

  64. 64
    David Losh says:

    RE: ARDELL @ 63

    It took me a while to follow this thread, but 3bedrooms, 1bath is a real house, in a real neighborhood, of Redmond.

    You may not get Redmond from a historical perspective, but Redmond is literally a back water. I was never sure why people lived there, but Microsoft had a lot of influence in that area.

    Redmond started a building frenzy in 1993, and hasn’t let up. If you look around there is still plenty of dirt to develop. Prices there have been unsustainable since the late 1980s, and it’s only gotten worse.

    If you have said that Education Hill? or Redmond is a stable market place, that simply isn’t true. You would just be projecting sales hype. There is no reason for Redmond to have the type of pricing it does.

  65. 65

    By Jonness @ 60:

    Ouch! Sold for $340,500 in 2005. It probably was valued at $650,000 in 2007. But it is currently listed at $269,900 and rotting on the market. Not bad. That’s only about a 60% drop in price from what it would have sold for in 2007.

    Ray is right. They are all coming back!

    Wow. You pull a number out of your butt and then do your price decline off of that, based on the list price of an active REO listing!!!????

    FYI the place apparently wasn’t worth less than 400k in 2008.

  66. 66

    By Jonness @ 60:

    By ARDELL @ 49:

    The short of that is “No, Ray. They are not ALL coming back.” :)

    Didn’t you also claim back in 2007 that Seattle was special; thus, prices would not decline there?

    As to the better part of your post, this is what you were probably thinking of:

    http://raincityguide.com/2007/02/06/ardell-on-where-is-the-2007-market-heading/

  67. 67
    Scotsman says:

    RE: ARDELL @ 63

    Well you would know- or not:

    “My prediction has been, that the 2007 Market will be similar to the market of 2006, that being strong and upwardly mobile. Not necessarily as strong as 2005, when interest rates were lower, but on an even keel with, or better than, last year.

    To determine momentum of the market, I look at absorption issues, and reduce the study to a somewhat predictable and mainstream market segment. To keep apples to apples, I target that portion of the market with the highest number of sales in a year’s time. The results are almost startling, with regard to upward momentum since the first of the year, and even better than I expected to see.”

    http://raincityguide.com/2007/02/06/ardell-on-where-is-the-2007-market-heading/

    Big Mo!

  68. 68
    ARDELL says:

    RE: David Losh @ 64

    I don’t agree at all, David. But that’s OK. I think a 3 bed 1 bath house is by textbook definition, functionally obsolete. I don’t care if that home is in Redmond, or Shoreline or Green Lake. It looks like it’s sitting on cinder blocks. :) It should be heading toward lot value, regardless of where.

  69. 69
    ARDELL says:

    RE: Scotsman @ 67

    Just as the Government Tax Credit propped up the market…so did the Lenders trash it when they turned off the faucet. There was a time in 2007 where there were NO…none, nada, jumbo loans. The lending criteria was changing so quickly it was impacting the market at lightening speed.

    Outside influences, be they Government or Private, clearly have the ability to swing the results and whip them into another direction.

    I remember when Desert Storm hit and wiped out all of the escrows in the office due to the overnight change in interest rates. Shit Happens. :)

  70. 70

    By ARDELL @ 68:

    RE: David Losh @ 64

    I don’t agree at all, David. But that’s OK. I think a 3 bed 1 bath house is by textbook definition, functionally obsolete. I don’t care if that home is in Redmond, or Shoreline or Green Lake. It looks like it’s sitting on cinder blocks. :) It should be heading toward lot value, regardless of where.

    If we’re now not talking about a specific listing, I would agree in the current market. If and when the market ever takes off again though, I can see 1.5 and less bath homes being the new condo. That’s what people with limited means will turn to. That’s based more on thinking many/most condos will be problematic for some time.

    A couple of years ago I ran into a place in Auburn where the half bath master had the space for a shower. It actually looked as if it were designed for a shower, but that it was not put in at the time of construction. Less than 5k and you’d have a 1 3/4 bath house. Something like that would be a great deal for a handy buyer or flipper.

  71. 71
    patient says:

    RE: ARDELL @ 69

    Chocolate happens when you get tunnel vision from a narrow set of technical factors and do not pay attention to economic fundamentals and sanity checks. What happened was predictable.

  72. 72

    Thanks for the presentation of the charts, and for including data for the Vancouver/Portland area. To balance out the seemingly ever-falling trends, for my blog I like to include a Housing Affordability chart prepared from data available from the WSU Washington Center for Real Estate Research. Charting this data shows a reverse-image of the Bubble and Bust.

    For my area of Clark County (OK, yes we are south of I-90; well south of Oly too!), the Housing Affordability Index (HAI) dropped slightly below 100, and is now at 191.5 – a high-point for the data going back to the second quarter of 1994 (King Co. is now at 127.0; Washington State Average at 160.7). We are also 20+ points higher than the previous high-point seen just prior to the Bubble. Just as Clark County has become a much more affordable part of the Washington State Community, I suspect some desirable parts of the Seattle area have become relatively more affordable than other nearby neighborhoods.

  73. 73
    ARDELL says:

    RE: patient @ 71

    Everything appears to be predictable in hindsight. But when lenders make changes…like zero down and appraisers not adhering to the value of the comps, it is not really predictable as to when or if they will reverse their policies.

    As example…when lenders stopped asking for a clear termite report before agreeing to lend money on a home, I didn’t think that would stick. The lenders decided that it was an acceptable business risk after weighing the cost of the process of requiring and reviewing the termite report against the cost of the few homes they “got back” as a result of termite damage.

    I thought that was crazy…but…I haven’t seen a buyer have to hand a clean termite inspection report to a lender in many, many years.

    When lenders change what they are willing to do…it is not always easy to predict that they will reverse their policies. Sometimes they do…sometimes they don’t.

  74. 74
    ARDELL says:

    What do you do with people who dislike truth? Had the lenders not folded up their tents on 8/3/2007…and instead did so on 1/4/2008 or not at all…then the prediction would have been 100% accurate, as it was until 8/3 when the lenders closed shop until they re could rethink what they were going to offer as to many products previously available.

    If someone wants to say that the event happening on 8/3/2007 was predictable to happen during 2007 vs 2008 or even 2006 or 2010…well, let’s just call that what it is. BS.

  75. 75
    David Losh says:

    RE: ARDELL @ 74RE: ARDELL @ 73

    No bank willingly gave me a loan until 2001, after that I bought two more houses, and maxed out all equity in refis.

    Didn’t you buy a house?

    Come on, every one I know in the Real Estate business took advatage, extreme advantage, of the liar loan hey day.

    You can’t turn around now, and say if only it were this that or the other. We all knew it had to end, and for sure in 2006, that was a big, big balloon of a message with double digit appreciation in residential Real Estate. As a matter of fact I think that’s when the bubble burst in other parts of the country.

    We had a run of five years, but in my opinion we should put those five years, and all appreciation in those five years, and put it in a box over in the corner.

    The point made by Jonness in comment 59 is valid. We should be looking back 10 years, rather than five.

  76. 76

    By ARDELL @ 74:

    What do you do with people who dislike truth? Had the lenders not folded up their tents on 8/3/2007…and instead did so on 1/4/2008 or not at all…then the prediction would have been 100% accurate, as it was until 8/3 when the lenders closed shop until they re could rethink what they were going to offer as to many products previously available.

    If someone wants to say that the event happening on 8/3/2007 was predictable to happen during 2007 vs 2008 or even 2006 or 2010…well, let’s just call that what it is. BS.

    Oh, so your prediction would have been accurate, but one of the 20+ things that affect real estate was different than what you were thinking it would be, so therefore the prediction is off? It has nothing at all to do with the fact that you can’t predict real estate prices. /sarc

  77. 77
    Jonness says:

    By Kary L. Krismer @ 65:

    Wow. You pull a number out of your butt and then do your price decline off of that, based on the list price of an active REO listing!!!????

    Exactly! I learned how to value houses from a professional RE appraiser. At least you got the joke. Then again, since you personally retained the services of an appraiser in 2007, you have a bit of an advantage understanding exactly what was going on back then when it came to false high appraisals. :)

  78. 78

    RE: Jonness @ 77 – Not sure why you think I obtained the services of an appraiser. Our 2007 Heloc was done on an automated valuation. They decided that value was too high after the property was sold and the loan paid off.

    Typically I have zero contact with appraisers–the main exception being where there is no keybox on the door. Most the contact with appraisers is when they call up asking for the amount of seller financing concessions on prior sales.

    IMHO, most of the appraiser abuse was on the refinance side of things, where the desired amount of the loan was based more on how much the borrower had spent on their credit cards than any other factor. I will note though that this is yet another area where the banks do things on the cheap. $400 for an appraisal is way too little to get much thought put into the process, if that’s what you do for a living.

  79. 79
    Clint Rowley says:

    Even if the labels are slightly confusing on the last graph, if the prices are still falling, then it may be worth waiting things out for a bit to see how low they go.

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