Case-Shiller: Home Prices Continue Dropping Rapidly in LA

Time for a monthly check-in of 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. – October data is released in December).

Here are the basic Case-Shiller stats for Los Angeles area (which Case-Shiller defines as LA and Orange Counties) as of October:

October 2008
Month to Month: Down 2.6%
Year to Year: Down 27.9%
Change from Peak: Down 34.4%

The following chart shows the Los Angeles HPI scaled such that the September 2006 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Los Angeles HPI was at or lower than it was in the latest data (January 2004).

Los Angeles home prices have declined at a fairly steady rate since late last year, and October was no exception. While October’s 2.6% drop was among the market’s bigger month-to-month declines, the largest month-to-month price drop was 4.3% in February.

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

And here’s one more chart, in which I have lined 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.

Of the eight markets Redfin serves, Los Angeles home prices have fallen the fastest two years after their respective peaks.

Looking at this latest data, there still does not appear to be any bottom in sight for Los Angeles home prices. If you are a seller that took your home off the market for the winter hoping for a rebound in spring, the current trends point toward continued disappointment. Of course, for buyers continued price drops means continually better deals to be found.