Case-Shiller: LA Home Price Drops Still Slowly Moderating

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, plus seasonally adjusted and tiered price data, 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. – April data is released in June).

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

April 2009
Month to Month: Down 0.9%
Year to Year: Down 21.3%
Change from Peak: Down 41.8% in 31 months

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 (July 2003).


Prices continue to decline in Los Angeles, and a 21% year-over-year drop is certainly nothing to sneeze at. However, it is defintely worth mentioning that the trend of decreasing magnitude of price drops in LA and San Diego is also continuing:


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


To recap, we have seen the following interventions in recent months meant to boost the housing market:

  • $8k first-time buyer tax credit
  • 4.5% – 5% mortgage rates
  • various moratoriums on foreclosures
  • numerous federal programs encouraging loan workouts

The apparent result of this host of actions has been a flattening to very slight upticks seen in the chart above, in a month that is historically one of the strongest of the year for the real estate market. I guess you can color me underwhelmed.

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.


It’s been six months now since we first pointed out on these pages the sign of a possible bottom on the distant horizon for Los Angeles home prices. Things are definitely still heading in that direction, but it could easily be over a year before price drops finally hit that bottom.

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