Case-Shiller: Prices Continue Declining Into Spring

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, hit the S&P/Case-Shiller website.

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. – March data is released in May).

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

March 2009
Month to Month: Down 2.0%
Year to Year: Down 8.0%
Change from Peak: Down 20.1% in 42 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 (September 2002).

Boston home prices actually increased in March in 2006 and 2007, and fell 1.1% in 2008. This year’s 2.0% 1-month drop is definitely something of a deviation from the recent pattern. It will be interesting to see if we still get a late spring / early summer bump in the HPI beginning in April like we did in 2008.

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.

While Boston had been showing much more resilience since the start of the bust, it seems that recent months have somewhat broken this trend. Even so, Boston’s home prices have still fallen less than most other cities measured by the Case-Shiller index, and would have to experience a massive fallout to “catch up,” which seems highly unlikely at this point.

*[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.]

Redfin By The Numbers, April Edition: More People Are Touring Homes

Let’s look at our brokerage stats in Boston to see how what our clients are doing right now reflects what’s happening in the market.

Our Clients Love Our Fanatical Service

We survey every client and track every transaction in a central customer database. For the surveys we received in April from our Boston clients:

• 24 clients responded to our customer-satisfaction survey and posted a review online, up from 19 in March.
• All 24 of those clients, or 100%, would recommend Redfin to a friend, the same rate from March.

In these surveys, Redfin asks customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.

More People Are Out Looking At Homes

In April, our Boston clients were busy touring homes and making offers:

• Redfin clients in Boston toured 396 homes in April, a 36% increase from the 292 homes toured in March.
• Our clients made 59 signed offers on homes, up from 44 in March.
• Our Boston agents were busy working on these signed offers:

o Sean Valiton: 30 offers
o Hannah Driscoll: 22 offers
o Adam Welling*: 7 offers

• 4 of those offers, or 7%, were on bank-owned foreclosures, up from 5% in March.

*Adam joined the Redfin team on April 20th. He’s a native of Marblehead and has 6+ years of real estate experience.

We had 25 people come to the home-buying class at our Somerville office to learn about the home-buying process and meet our agents. Check out the slide deck from the class.

It’s Taking 49 Days To Close On A Home

In April, it took 9 days longer for our Boston clients to close on their homes than it did for Redfin’s clients in other markets:

• For our clients who bought re-sales, the average time from initial agreement on terms to the close of the deal was 49 days, up from 45 days in March; for Redfin’s April clients in other markerts, the average was 40 days.
• 2 of our clients failed to get financing, up from 0 in March.
• 2 of our clients’ deals failed the home inspection, down from 3 in March.
• Of our closed deals, the average discount off list price for homes sold was 3.13%, down from 4.05% in March.

“The closing process is taking more time because it’s taking up to twice as long to get homes appraised,” says Redfin Boston agent Hannah Driscoll. “It takes so long get an appraisal that we have to set closing dates 60 days out from when the offer is accepted – it used to be 45 days out.”

Look For Our May Report

We’ll be back next month with our analysis of the May numbers. Let us know what you’d like to see in that report.