Case-Shiller: Effects of Tax Credit Appear to be Waning

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. – September data is released in November).

Here are the basic Case-Shiller stats for San Diego County as of September:

Eleven of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between August and September (down from sixteen in August). New York, Boston, Charlotte, Seattle, Dallas, Portland, Tampa, Las Vegas, and Cleveland all marked seasonally-adjusted drops month-to-month.

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

As the effects of the tax credit and low rates appears to begin to wear off, it’s no surprise to see the high tier turn back down first, since those types of stimulus are likely to have little effect on the most expensive homes.

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%:

With the tax credit having been extended until the spring, and pretty much all the benefit having been squeezed from low rates and tax giveaways, it seems likely that we will see some price deterioration in the next few months as we head through winter. Beyond that is anybody’s guess.

The October Market Wrap Up

Let’s take at look at some October numbers for San Diego County and see how they compare to a year ago.

Central San Diego

• 1,158 homes sold in October
• The median sales price was $320,000, down 1.54% from October 2008

North County Coast

• 589 homes sold in October
• The median sales price was $450,000, down 12.78% from October 2008

North County Inland

• 881 homes sold in October
• The median sales price was $330,000, up 0.30% from October 2008

East County

• 470 homes sold in October
• The median sales price was $285,000, the same as October 2008

South County

• 570 homes sold in October
• The median sales price was $285,500, down 1.55% from October 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for San Diego County. To see what’s happening in your neighborhood, check out our stats & trends pages.

The $8,000 Home-Buyer Tax Credit Has Been Extended & Expanded

Earlier today, President Obama signed new legislation extending the deadline for the home buyer tax credit into 2010 and expanding it to include current home owners who are looking to buy a primary residence.

The Basic Requirements

You qualify for the tax credit if the:

• Home you’re buying will be your primary residence
• Purchase price isn’t more than $800,000

This credit is not a loan; it’s yours, but keep in mind you have to live in your new home for three years. If you sell the home in less than three years, you’ll have to pay back the money.

What’s Changed?

With the new legislation, buyers have more time to find a home and more buyers are eligible for the tax credit:

• New deadline: To qualify, you need to be in contract with a seller by April 30th & close on the home by June 30th (The previous deadline was November 30, 2009).
• Not just for first-time buyers anymore: Home buyers who’ve owned and occupied a home for at least five consecutive years during the past eight years are eligible for a credit up to $6,500.
• Increased income limits: Individuals making less than $125,000 and couples making less than $225,000 are eligible (The limits used to be $75K & $150K).

First-time buyers are eligible for a credit up to $8,000 on homes purchased between January 1, 2009 and June 30, 2010. Qualified homeowners can a credit up to $6,500 on homes purchased between November 7, 2009 and June 30, 2010.

Bonus Link

You can check out the full text of the bill. Scroll about halfway down to sections 11 & 12:

• Sec. 11. Extension and Modification of First-Time Homebuyer Tax Credit.
• Sec. 12. Provisions to Enhance the Administration of the First-Time Homebuyer Tax Credit.