Case-Shiller: Home Prices Drop Slow and Steady to Early ’03 Levels

Let’s check in on the S&P/Case-Shiller Home Price Indices (HPI).

For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – January data is released in March).

Here are the basic Case-Shiller stats for the Boston area* as of January:

January 2009
Month to Month: Down 1.5%
Year to Year: Down 7.3%
Change from Peak: Down 17.4% in 40 months

The following chart shows the Boston area HPI scaled such that the September 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Boston area HPI was at or lower than it was in the latest data (April 2003).

Price declines in the last few months of data have actually been relatively mild in and around Boston, compared to what we’re seeing in other markets around the country. In addition, the drop from December to January held a pretty steady rate that Boston has seen since about September. At least it’s a form of “stability,” right?

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare the Boston area’s performance to other areas across the country:

And here’s our final chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

Boston still stands out from the pack with one of the smallest overall declines, despite having been falling the longest. If anyone has any theories as to why that might be, let’s hear them in the comments.

*[Case-Shiller defines Boston as the entire Boston-Cambridge-Quincy, MA-NH Metropolitan Statistical Area, which includes all or part of the following counties: Essex MA, Middlesex MA, Norfolk MA, Plymouth MA, Suffolk MA, Rockingham NH, and Strafford NH.]

March City/Neighborhood Price Reductions

Let’s take our monthly look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 165 cities/towns we ranked in the Boston area this month, 116 (70%) had price-reduced ratios of fifty percent or more. Holliston and Lunenburg were the only carry-overs from last month’st top ten.

Getting a little more granular, let’s look at the top ten Boston area neighborhoods for price reductions:

Of the 45 neighborhoods we ranked in the Boston area this month, just 6 (13%) had a price-reduced ratio of fifty percent or more. Grafton held its spot at #1, moving up from 63% last month to 65% this month. St. Elizabeth’s, Andrew Square / Columbus Park, Oak Square, and Salisbury / West Tatnuck also all carried over from last month’s top ten. These are the neighborhoods where you might want to look for sellers that are more anxious to sell.

We’re still seeing a degree of consistency in which neighborhoods and cities have the most price reductions. Are sellers in these locations just not very good at finding the right market price in the first place, or are they so anxious to sell that they drop the price early and often? Either way, the regions with the really high percentage of reduced-price homes are probably a good place to go bargain-hunting.

Biggest Discounts March Update

Let’s have an update on where buyers are currently getting the biggest discount off the asking price. Our goal in sharing this data is to help potential buyers to know which neighborhoods are softer in terms of sale price discounts off list price, to better equip you when making an offer, and help you know where to look for potential bargains.

In the chart below, we have taken all sales data from the last two months in Redfin’s Boston service area and sorted it by zip code. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any zips with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

For a quick look at where a given zip code is located, just type it into the Redfin search box, or drop by the handy USNaviguide.com zip code map.

Here are the top ten zip codes with the largest overall discount:

Last month‘s champ Roxbury (02119) slipped slightly, as the average discount dropped by nearly 50%, but moving it down to #3. In addition, the area-wide discount increased from 4.9% in December to 5.7% at the end of January.

Of the 497 sales we tracked in the 2-month period, just 19 homes sold for 20% or more off the asking price, while 59 homes sold for more than asking. Boston’s overall trend moved toward slightly larger discounts.

Redfin’s Boston February Update: 177 Homes Toured, 36 Offers

Beginning with February, Redfin is publishing monthly Boston Area real estate stats, summarizing what we’re up to in the market, and how the market is changing. This is our first crack at it, which means we’ll only present a few numbers for February.

Market Activity

• 7,493 new MLS listings (the current total is 43,612).
• 7,076 price reductions.
• 22,140 homes were added to Boston Redfin users’ favorites list.

Brokerage Activity

• 177 homes were toured by our clients through Redfin field agents.
• 24 people attended our monthly home buying class.
• 36 clients made offers.
• 11 clients responded to our customer-satisfaction surveys and posted an online review.
• 100% of our February Boston Area clients would recommend Redfin to a friend.

What else do you want to know? Your comments and suggestions are at the core of our goal to better serve our customers. We’d love to hear from you. If you haven’t already, join the Boston Redfin forum and sign up for listing alerts and our monthly newsletter. As always, thanks for using Redfin!