Seattle OFHEO Index now dropping Q2Q

deejayoh

OFHEO just released their data for the first quarter of 2008. This was the last index showing positive appreciation for Seattle (and probably the least accurate given the % of Non-conforming loans in this market).

While it still shows a Y2Y increase of 2.8%, it now shows that prices fell 0.4% in the last quarter. Not really newsworthy, but notable because this is the longest running repeat sales index for the market, and it rarely reflects negative market performance: This is the first Q2Q drop in this index for Seattle since Q4 '94 (-0.3%)- and before that you had to go back to Q4 '90 (-0.8%)

The only annual downturn in this index for the Seattle MSA was in 1982.

The_Tim

I've never really cared much for the OFHEO index, primarily because they include refinances in there, which (IMO) throws everything off and doesn't really reflect actual home prices. However, this line from the P-I article on today's numbers caught my attention:

The Office of Federal Housing Enterprise Oversight's nationwide purchase-only index, which excludes refinances, was down 3.1 percent from a year earlier and a seasonally adjusted 1.7 percent from the end of 2007. Both were records.

I didn't even know there was a purchase-only index, but it doesn't surprise me that it is showing a much larger decline than the phony-baloney purchase+refinance index.

Next week after I get back from Boston I'll have to do some searching to see if I can get my hands on this purchase-only index.

deejayoh

yeah, I *think* the numbers I quoted above were for the purchase only index. But you have to caveat that with the fact that this index tracks only conforming loans - which means LT $471k and no subprime. That is probably the most stable segment of the market - and it only reflects about a third of overall loan volume. It's gone up less than other metrics and will probably go down less. That is why I said it is probably the least accurate gauge of the market.