Case-Shiller Tiers: High Tier Prices Shoot Up

Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

  • Low Tier: < $286,068 (up 1.8%)
  • Mid Tier: $286,068 – $456,009
  • Hi Tier: > $456,009 (up 2.0%)

First up is the straight graph of the index from January 2000 through March 2015.

Case-Shiller Tiered Index - Seattle

Here’s a zoom-in, showing just the last year:

Case-Shiller Tiered Index - Seattle

All three tiers shot up strongly in March, with the high tier gaining the most ground.

Between February and March, the low tier increased 1.1 percent, the middle tier rose 1.9 percent, and the high tier gained 2.9 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through March 2015.

Case-Shiller HPI - YOY Change in Seattle Tiers

Year-over-year price growth actually shrank slightly in the low and middle tiers, but grew in the high tier. Here’s where the tiers sit YOY as of March – Low: +9.7 percent, Med: +5.8 percent, Hi: +7.7 percent.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Case-Shiller: Decline from Peak - Seattle Tiers

Current standing is 18.0 percent off peak for the low tier, 12.6 percent off peak for the middle tier, and 5.6 percent off peak for the high tier.

(Home Price Indices, Standard & Poor’s, 2015-05-26)

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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.

26 comments:

  1. 1

    Brainless Seattle Buying By Investors With No Tenant Savvy

    Apartments are going for $2000 (1 Bdrm) to $4000 (3 Bdrm)….I’m sure the Millenials are biting at the bit to rent them….

    Even the “old money” is running dry…

  2. 2
    astelin says:

    RE: softwarengineer @ 1

    You strike me as more of a “glass is half empty” kind of guy…

  3. 3
    Erik says:

    We are in the expansion period. Things will probably get better for about 8 or 9 more years before they blow up in our faces.

  4. 4
    redmondjp says:

    By Erik @ 3:

    We are in the expansion period. Things will probably get better for about 8 or 9 more years before they blow up in our faces.

    Come on, Erik! Don’t let us down.

    You rolled the dice once and won, so why not do it again? Cash out of W. Seattle while the gettin’s good, and find the next up-and-coming area. I know you have at least one more flip in you.

  5. 5
    Erik says:

    RE: redmondjp @ 4
    Hahaha! We’ll see, maybe I’ll just buy a second one. I sold before because I was poor and wanted the money so I could have more fun and eat natural foods which I did. Since I got all that money from the Kirkland remodel and got my masters degree I have money, so I look at these places as investments instead of survival tools. The next crash won’t be for a while and I have enough money now, so there really is no reason to sell.

    People think differently about money when they don’t have any. I think more longterm now because I can afford to.

  6. 6
    redmondjp says:

    RE: Erik @ 5 – Ahhh, but Erik, people back in May 2005 didn’t think a crash was imminent either. History proved them wrong. The smart money gets out while the gettin’s good. Dumb money chases the market down . . .

  7. 7
    JustJoan says:

    By Erik @ 3:

    We are in the expansion period. Things will probably get better for about 8 or 9 more years before they blow up in our faces.

    Expansion indeed: http://www.geekwire.com/2015/a-silicon-valley-exodus-redfin-analysis-finds-that-bay-area-residents-increasingly-looking-for-homes-in-seattle-and-portland/

    JustJoan

  8. 8
    Dave says:

    RE: JustJoan @7

    and after that the real fun begins.
    http://www.cnbc.com/id/101884085

    housing prices may react to that migration event.
    just sayin..

  9. 9
    Blurtman says:

    By Dave @ 8:

    RE: JustJoan @7

    and after that the real fun begins.
    http://www.cnbc.com/id/101884085

    housing prices may react to that migration event.
    just sayin..

    Erect a border fence now!

  10. 10
    Erik says:

    RE: redmondjp @ 6
    People smarter than us saw it coming. It followed the old 18 year real estate cycle. Get out before 2024!

    http://www.dce.harvard.edu/professional/blog/how-use-real-estate-trends-predict-next-housing-bubble

  11. 11
    Erik says:

    RE: JustJoan @ 7
    Yeah, Californians are repulsive, but they do have a lot of money. I vote we let them in and sell our homes to them before the next real estate bust. Then when the market busts we can laugh in their stupid tanned Californian faces! Who’s with me?

  12. 12
    Erik says:

    RE: Dave @ 8
    Sorry California, but you will not be getting any water from Washington state. You partied in the sun on the beach for a longtime and now you want a bail out. You need to pay the price for your careless ways in the form of water restriction.

  13. 13

    Did Anyone Blog Jobs for a California Exodus?

    Or are we assuming they just grow out of the woodwork in Seattle?

    Seems to me the Silicon Valley is into Micro-process Technologies and PCT Systems etc. Doesn’t sound like Seattle’s Amazon or MSFT at all….

  14. 14

    RE: astelin @ 2
    So You Admit the Glass is Half Full?

  15. 15

    RE: Erik @ 5

    Better Not Spend All Your Cash Erik

    You may need it later.

  16. 16

    By softwarengineer @ 13:

    Did Anyone Blog Jobs for a California Exodus?

    Or are we assuming they just grow out of the woodwork in Seattle?

    Seems to me the Silicon Valley is into Micro-process Technologies and PCT Systems etc. Doesn’t sound like Seattle’s Amazon or MSFT at all….

    Are you asking if there are any big tech companies in the Silicon Valley? Ever heard of a little company called Apple? How about Google? Hewlett-Packard?

  17. 17

    RE: Kary L. Krismer @ 16

    Apple has some similarities to MSFT.

    But is MSFT looking to hire the skills of ex-Apple employees? The $10,000 question.

    “….Stanford Research Park / Stanford Industrial Park – Frederick Terman’s plan. Almost all in Palo Alto, and Research combined with manufacturing, usually with a strong defense business. 1940s onward. Much of the defense business moved out by 1998, as they were outbid for people, and Texas or Florida was much cheaper. Biotech has moved in.
    2.Southern Pacific land grant development phase, mostly manufacturing in Mountain View, Sunnyvale, Santa Clara, Milpitas, and San Jose. 1950s to about 2004. Much of the manufacturing has now relocated, to Texas, Arizona, Mexico, China, etc.
    3.A massive expansion phase driven by the success of the personal computer, with companies in Los Gatos, Hayward, Morgan Hill, and Redwood City, and even reached out to Salinas. 1981-1992. This was very automobile centric.
    4.Web 1.0, which needed to be near the optical fiber which was first along the SP railroad tracks. 1993 to today.
    5.Web 2.0 which sometimes uses the cloud and is not as tied to the main fiber lines, needs to be near food and near Caltrain (SP tracks) for an easier commute. 1998 to today….”

    http://www.quora.com/Why-are-Silicon-Valley-companies-located-where-they-are

    One thing this jobless recovery can create is manufacturing moving out and version updates on old school software or watches that replace iPhones….IOWs, miniaturization without new circuit inventions.

  18. 18

    Here’s another difference. In Seattle I don’t think there have been organized protests against tech companies and their workers.

    http://www.businessinsider.com/tech-bus-protests-are-over-but-silicon-valley-cant-ignore-its-issues-2015-5

  19. 19

    RE: Kary L. Krismer @ 18
    Interesting Read Kary

    I especially liked the F__k Zuck reference….what do the workers for Google and Facebook really do? Why is their work mostly technical and not high school level? And yes the $10,000 question, can any inexperienced worker do their jobs? From another country for less pay?

    Tech companies giving back to the community? How about charities to like Africa? Tech companies remind me of organized crime…

  20. 20

    RE: Kary L. Krismer @ 18

    There is lots of protesting in Seattle….but the past use of illegal rubber bullets during the Battle of Seattle over the Democrats joining the WTO has made protesting a very risky activity in Seattle…

  21. 21
    wreckingbull says:

    Before we mock Californians too much in the thread, let us not forget we are also screwed. So yeah, they are not getting our water, not because we don’t want to give it, but because we don’t have enough for ourselves, let alone them.

    I live in ag country, and the farmers I have talked to have never seen anything like this in their lifetimes.

    http://thinkprogress.org/climate/2015/05/18/3659911/washington-drought-emergency-declared/

  22. 22
    Mike says:

    By Kary L. Krismer @ 18:

    Here’s another difference. In Seattle I don’t think there have been organized protests against tech companies and their workers.

    http://www.businessinsider.com/tech-bus-protests-are-over-but-silicon-valley-cant-ignore-its-issues-2015-5

    I guess that depends on your definition of ‘organized’…

    http://www.capitolhillseattle.com/2014/02/anti-gentrification-protesters-target-corporate-shuttles-on-capitol-hill/

  23. 23
    astelin says:

    RE: softwarengineer @ 14 – I admit that your view on this blog is paranoid at best, or a completely disconnected view of reality at worst.

    I’ve lurked on this site for a number of years, and have noted with interest that your mantra of “the other shoe is about to drop” after the crash simply hasn’t played out.

    While the local economic growth is in full swing right now, the chief growth areas are relatively diverse in industry and size. The idea that this is a bubble might be true; but the asset bubble is in tech start ups and corporations, not in real estate. Seattle has one of the most diverse economies in the country, and your posts comparing the Seattle tech industry to Silicon Valley is either incredibly dated or simply outright false.

    To refer back to the blog post, I think any “correction” to the local real estate market that may occur in the next few years will not be a result of a real estate correction; the fundamentals are there. Any correction that will show up will be more the result of the economic boom of the region turning into a bust, which I simply don’t see happening. If anything, it will cool down some.

    When looking at tech industries specifically, there is incredible incentive for Valley employees to move up here. Our cost of living is undervalued compared to the Bay area and will continue to be until we get some market equilibrium. Geekwire has done a few articles discussing the Silicon migration north. As long as that continues to play out and we still have robust (non-tech giant) growth, the real estate boom will not go away.

  24. 24

    RE: astelin @ 23
    Name calling SWE Paranoid?

    Here’s a Snippet in Today’s News:

    “….On Friday at 8:30 a.m. ET, the Bureau of Economic Analysis will release its second estimate of first-quarter gross domestic product. It is expected to show that the economy contracted 0.8% in the first quarter….”

    http://finance.yahoo.com/news/ready-depressing-news-us-economy-211800755.html

    Another GDP Q2 like that and we’re officially in another Recession.

  25. 25
    astelin says:

    RE: softwarengineer @ 24 – From the article:

    “Economists, however, caution against reading too much into the slump in output. They argue the GDP figure for the first quarter was held down by a confluence of temporary factors, including a problem with the model the government uses to smooth the data for seasonal fluctuations.

    Economists, including those at the San Francisco Federal Reserve Bank, have cast doubts on the accuracy of GDP estimates for the first quarter, which have tended to show weakness over the last several years.

    They argued the so-called seasonal adjustment is not fully stripping out seasonal patterns, leaving “residual” seasonality.”

    The sky is not always falling. And national GDP does not equal local economic growth stalling. I have yet to hear a rational argument from you defending your position.

  26. 26

    RE: astelin @ 25 – It would be nice if they would just forego the seasonal adjustments altogether and just make YOY comparisons. Case-Shiller offers seasonally adjusted numbers along with their regular index numbers, but I don’t see anyone really looking at them.

    That could though be an explanation for the relatively huge drop last year. The weather claim last year clearly didn’t cut it.

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