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New Data on House Prices - Includes Seattle

synthetiksynthetik
edited March 2007 in Seattle Real Estate
New Data on House Prices
Here's a picture of house prices in several major coastal metro areas in the US, including today's newly released data for the end of 2006:

hpi_coast_st1b.gif
the data expressed as the annual rate of appreciation instead of the price level, it looks like this:

hpi_coast_st2c.gif
One last thing to remember: house prices take a long time to fall, and can fall a long way. During the last downturn in the housing cycle real prices fell by 25-50% in many metropolitan areas over the course of several years. An equivalent fall in this housing market downturn would take these indexes down to around 150 or so by the year 2010.

hpi_coast_lt1b.gif

Thanks to Calculated Risk for the link.

Comments

  • synthetiksynthetik
    Is it just me or does that green line look like it lags behind the others for some reason?
  • sourmashsourmash
    It is lagging, but it's also clear that the slope is gentler.

    I like the indexed real price curves, those are instructive.

    If one assumed a typical 4%/yr rate of appreciation starting in 1998, we'd be at about 137 by now.

    If Seattle dropped from 170 to 135, that would represent about a 20% cut from today's prices. Which feels about right to me.

    Question is, how fast does it happen?
  • sourmashsourmash
    Oops, the real price index already adjusts for inflation. So 4%/year is too high a target for "normal" ... more like 1%/year.

    So, that would put us more squarely in the 35% overvalued neighborhood.
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