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 New York City commuter area* as of November:

November 2011
Month to Month: Down 1.1%
Year to Year: Down 2.3%
Prices at this level in: February 2004
Peak month: June 2006
Change from Peak: Down 23.2% in 65 months
Low Tier: Under $282,779
Mid Tier: $282,779 to $455,812
Hi Tier: Over $455,812

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:


New York’s low and high tier both fell in November, but the middle tier inched up a bit. Month to month, the low tier was down 0.5%, the middle tier rose 0.2%, and the high tier decreased 1.5%.

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.

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.


Four cities hit new post-peak lows in November: Tampa (not shown above) at 47.4% off peak, Atlanta at 34.8% off peak, Las Vegas at 61.1% off peak, and Seattle at 31.0% off peak.

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 the New York City commuter area as all of Fairfield, New Haven, Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren, Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester, and Pike counties.]