Case-Shiller: Spring Finally Arrives for Boston 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. – May data is released in July).

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

May 2011
Month to Month: Up 2.7%
Year to Year: Down 3.2%
Prices at this level in: April 2003
Peak month: September 2005
Change from Peak: Down 17.2% in 68 months
Low Tier: Under $252,578
Mid Tier: $252,578 to $391,150
Hi Tier: Over $391,150

Only three of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between April and May (down from 7 in April and 18 in March). Boston ousted DC for the biggest increase, gaining 2.7% on the month. Only Tampa, Las Vegas, and Detroit continued to fall.

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:


Things took a while to warm up this year in Boston, but now that they did, Boston clocked in the highest month to month increase of any Case Shiller city. Month to month, the low tier was up 3.9%, the middle tier rose 2.3%, and the high tier increased 2.0%.

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.


Just three of the twenty cities tracked by Case-Shiller hit another new post-peak low as of May as the 20-city composite ticked up again, hitting its highest point since January.

Methodology: The Case-Shiller index tracks price changes in sets of homes of similar size and style to better determine changes in what people are willing to pay for the same home over time. If data is available from an earlier transaction for the same home, the two sales are paired and treated as a “repeat sale.” Repeat sales that are too far apart, sales between family members, lot splits, remodels, and property type changes (e.g. from single-family to condos) are excluded from the calculations. All remaining repeat sales are totaled together and weighted based on the time between each sale, then the data for the most recent three months is averaged together to create a given month’s index value (i.e. – September’s index represents the average of the data from July through September).

The three price tiers plotted in the charts below simply represent the top, middle, and bottom third of all sales, based on the initial sale price. In other words, if there were 3,000 sales in the three-month period, 1,000 of them would be in the low tier, 1,000 in the middle tier, and 1,000 in the high tier, by definition.

*[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.]

  • Marc Lamphier

    Spring has finally arrived…  so it is a good thing that house prices, in real terms, are 50% higher than they were in 2000? And we should be happy that prices are starting up even higher?

    I never understand the logic when people say this: (a) overpriced housing was the source of our ecnomic troubles, (b) overpriced housing increases the cost of living for the oridnary working person. Perhaps real estate agents and speculators make out OK; I am not sure anyone else does. .