Case-Shiller: Low End Shot Up as Tax Credit Neared Expiration

Greetings, Atlanta! I’m Tim Ellis, Redfin statistics blogger. I’d like to thank Glenn and the good people at Redfin for giving me the opportunity to delve into real estate data here in their latest market. To kick things off, let’s take a look the S&P/Case-Shiller Home Price Indices (HPI), which were just released a couple days ago.

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Keep in mind that all of the charts in this series of posts are based on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted data, hit the S&P/Case-Shiller website (requires free registration). 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. – October data is released in December).

Here are the basic Case-Shiller stats for the Atlanta area* as of October:

October 2009
Month to Month: Down 1.0% (raw)
Month to Month: Down 0.2% (seasonally adjusted)
Year to Year: Down 8.1%
Change from Peak: Down 19.3% in 27 months

Eleven of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between September and October (the same number as September). Dallas, Atlanta, New York, Boston, Las Vegas, Cleveland, Miami, Chicago, and Tampa all marked seasonally-adjusted drops month-to-month.

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


Atlanta’s low tier actually increased substantially from September to October, gaining 2.6% in a single month (that’s an annual growth rate of 34.2%). Since the middle tier was down about a percent and the high tier was flat, this looks to me like it is most likely a result of a rush of first-time homebuyers attempting to beat the (now-extended) tax credit deadline.

Here’s a look at the seasonally-adjusted month-to-month figures in Redfin’s markets, with annotations of the beginning and the original end of the homebuyer tax credit, so you can see that I’m not just making stuff up when I say that the effect of the tax credit on home prices appears to be waning.


Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:


Here’s our peak decline 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.


Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:


The excellent economics news site Calculated Risk posted a great roundup on Sunday of 2009′s various government programs intended to prop up home prices, and when each is currently allegedly going to end. With the housing credit expiring next spring, mortgage-backed securities (MBS) purchases ending in the first quarter, and tighter lending standards from the Federal Housing Administration (FHA) on the way, home prices still may be poised to fall a bit further before all is said and done.

*[Case-Shiller defines Atlanta as the Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area, which includes all of the following counties: Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Cobb, Coweta, Dawson, De Kalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Haralson, Heard, Henry, Jasper, Lamar GA, Meriwether, Newton, Paulding, Pickens, Pike, Rockdale, Spalding, and Walton.]