Case-Shiller: Market Cooled Further in July

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

Up 0.6% June to July
Up 7.1% YOY.
Down 11.1% from the July 2007 peak

Last year prices rose 1.9% from June to July and year-over-year prices were up 12.5%.

The July data shows further cooling in the crazy home price gains we had been seeing, with the year-over-year level dropping to its lowest level since October 2012.

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):

Seattle’s position for month-over-month changes fell from #9 in June to #12 in July. New York, Detroit, Miami, Dallas, Portland, Las Vegas, Denver, Los Angeles, Chicago, Minneapolis, and Tampa all saw home prices rise more between June and July than they did in Seattle.

Case-Shiller HPI: Month-to-Month

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

In July, nine of the twenty Case-Shiller-tracked cities gained more year-over-year than Seattle (one more than June):

  • Las Vegas at +12.8%
  • Miami at +11.0%
  • San Francisco at +10.3%
  • Los Angeles at +9.0%
  • Detroit at +8.4%
  • San Diego at +8.3%
  • Portland at +8.2%
  • Dallas at +7.4%
  • Tampa at +9.1%

Ten cities gained less than Seattle as of July: Atlanta, Denver, Boston, Phoenix, Minneapolis, Chicago, Washington DC, New York, Charlotte, and Cleveland.

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 eighty-three months since the price peak in Seattle prices have declined 11.1%.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of July 2014, Seattle prices are still roughly right around where they were in March 2006.

Case-Shiller: Seattle Home Price Index

Check back later this week for a post on the Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 09.30.2014)

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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.

11 comments:

  1. 1
    Saffy The Pook says:

    If you take the raw HPI graph all the way back to ’87, it looks like we’ve pretty much reverted to the historical mean rate of appreciation. Time will tell, but it’d sure be nice to see a boring ~4.8% YOY appreciation trend sustained for a decade or so.

    Cue the doomsayers…

  2. 2

    RE: Saffy The Pook @ 1

    Nothing is Impossible

    But one thing about the NWO we’re in now, its all new and the manufacturing past [aka, 1987] or even the Baby Boomer historical fortunes as college graduates compared to high school educated as a valid recent historical comparison shines like a $3 bill….

  3. 3
    The Kraken says:

    RE: Saffy The Pook @ 1

    What happens to that appreciation rate you want when you compare it to wage growth?

    4.8% is still much to high of a rate for the long term.

  4. 4
    Shoeguy says:

    By Saffy The Pook @ 1:

    If you take the raw HPI graph all the way back to ’87, it looks like we’ve pretty much reverted to the historical mean rate of appreciation. Time will tell, but it’d sure be nice to see a boring ~4.8% YOY appreciation trend sustained for a decade or so.

    Cue the doomsayers…

    That sounds just like the “prices will plateau for a good long while” talk from 2006….

    Oh, and you will not see a 4.8% increase in valuation over the next decade as interest rates rise back to historic norms, especially if incomes do for the next ten years what they’ve been doing for the last 20.

  5. 5
    Erik says:

    RE: Shoeguy @ 4
    Logically from a mathematical perspective that seems valid. As Tim has shown on this site, interest rates and housing prices have a loose correlation at best. Affordability does not remain constant. Historically, there are times when housing prices go up and interest rates go up.

    Let me put this in terms you can understand. When you sell Kobe Bryant shoes, the demand for the shoes doesn’t necessarily correlate to Kobe’s performance. Now set Kobe Bryant = Interest rates and His Shoe line = houses. There is a loose correlation at best.

  6. 6

    RE: Erik @ 5

    There’s One Problem Erik

    Once you eliminate the rich elite from average household incomes this happens:

    “…The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially….”

    http://www.nytimes.com/2014/07/27/business/the-typical-household-now-worth-a-third-less.html

    Shoeguy’s right, we’re on a spiral downward toward 3rd world status. Our middle income is not near tops in the world anymore and its on a decline vector with no end in sight. Globally, America is in the backseat now.

  7. 7

    RE: softwarengineer @ 6

    And If They Used “Real Inflation” Adjusted the Last Decade

    That $58K figure could easily drop in the $35K realm.

  8. 8
    Erik says:

    RE: softwarengineer @ 7
    Ya, I suppose shoe salesman is probably correct. When affordability goes down, that puts downward pressure on housing prices.

  9. 9
    SaffyThePook says:

    By The Kraken @ 3:

    RE: Saffy The Pook @ 1

    What happens to that appreciation rate you want when you compare it to wage growth?

    4.8% is still much to high of a rate for the long term.

    I’d say that wage growth in Seattle is pretty assured at all levels, based on the expansion of SW and other tech jobs locally as well as our pending $15 minimum wage.

  10. 10
    Erik says:

    RE: SaffyThePook @ 9
    Software people are the minority.

  11. 11
    Blurtman says:

    RE: softwarengineer @ 7 – Yes, but if you buy now, that appreciating home can make up for a less than optimal salary. In fact, why not buy 2 or 3 homes?

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