Case-Shiller: Another Winter for Home Prices

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index 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. – November data is released in January).

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

Nineteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between October and November (the same as between September and October): Only Phoenix saw an increase, for the second month in a row. This month Chicago bumped Atlanta out of the bottom spot, falling 3.4% in a single month.

Here’s a look at the latest local tiered data, back through 2000:

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

All three of Boston’s tiers fell in November. Month to month, the low tier was down 0.3%, the middle tier fell 0.9%, and the high tier decreased 1.7%.

In this next chart, I’ve visualized the month to month trends of all twenty Case-Shiller-tracked cities. Green and above the horizontal axis if they were increasing in the month charted, red and below the axis if they were decreasing. I’ve excluded 2000 through 2004 since they looked largely the same as 2005 (mostly green).

Just five months ago, all twenty cities saw month to month gains. Now just one is not the red.

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Middlesex County Home Sales Plummet in January After Busy December

But the good news: winter is still nowhere in sight.

The number of single family homes (SFH) sold in Middlesex County fell by a sharp 36.2% from December to January. But don’t be alarmed! All this really means is that December was much busier than normal and a reflection of the high-volume touring and offer writing months we had in October and November.  Sales slowed down to normal again through the holiday season, which is why we saw the huge drop in sales in January.

Prediction: Barring a Huge Catastrophic Snowstorm, Sales Will Shoot Up This Spring
Here’s some more good news: in January, our agents showed 12% more homes than we did last January. “Buyers took a very short holiday this year, and due to this crazy winter with almost no snow, the buying season is picking up speed about two months earlier than it did last year,” according to Hannah Driscoll, agent on Redfin’s Boston Metro team.  A 9.7% increase in the number of homes for sale in January adds some fuel to the buyers’ fire, and because in real estate supply drives demand, this supports the notion that sales will rebound in the coming months.

For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-Boston-Real-Estate-Market-Report-January-2012. Want to know how the Boston real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:

• MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
• $YOY = Year-over-year change in the median price per square foot.
• Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75