Case-Shiller: Nationwide Markets Simultaneously Bouncing Up

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. – June data is released in August).

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

Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between May and June. Only Las Vegas, Detroit, Seattle, and Charlotte still saw seasonally-adjusted drops month-to-month.

San Diego seemed to be approaching a bottom somewhat naturally since late last year, however I was not expecting to see prices actually reach that bottom until later this year or early next year. Given the fact that nearly every city in the country seems to be simultaneously bouncing this spring, I’d say something external to San Diego may be behind the recent move.

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.

It’s quite noticeable in both of the above charts that almost every city we’re tracking seems to have taken a sudden upward turn with the most recent few months of data. Despite the fact that there was a nearly two year spread in when the various markets hit their peak (Boston in September 2005, Seattle in July 2007), nearly every market appears to have turned a sharp corner to the positive after “bottoming” in March or April.

A commenter on my Seattle site made an astute observation about this phenomenon this morning:

Since it is still essentially true that “real estate is local”, what could cause every city to suddenly and simultaneously reach an equilibrium point where prices reversed course?

Answer: it just so happens that the home buyers’ tax credit was enacted with the American Reinvestment act (stimulus package) effective February 17, 2009. March 2009 was the first full month that American home buyers had the tax credit as an incentive. It changed their behavior and made them buy homes. It also expires on December 1, 2009 unless it is extended.

Once again, government policy is impacting asset valuations. Either we’re seeing a lasting nationwide housing bottom marked by an extraordinarily well-timed tax incentive, or a new “bubblet.” Case Shiller won’t tell us which until 2010.

It remains to be seen whether the NAR’s lobbying efforts to get the $8,000 tax credit extended beyond November will be successful. And even if they do convince Congress to extend it, the effect may be largely diminished. The program may have already pulled forward as many sales as it can during its spring and summer run.

52% Of Offers Are On Homes With Multiple Bids

In July, over half the offers our agents presented to listing agents in Southern California were on homes with at least one other offer.

To Anna Nevares, our rock-star agent in San Diego, this number seems low:

It feels like almost all my clients are bidding on homes with multiple offers. Nearly every bank-owned home has more than one offer and many regular sales are also aggressively priced to attract multiple offers. If you think you’ve found a good home with a good price, chances are a lot of other buyers have also found that home.

Anna’s Tips For Multiple Offer Situations

While it can be tough to be a buyer right now in San Diego, there are certain things you can do to improve your chances of having the winning bid on a home with other offers. Check out Anna’s four tips:

1. Be prepared to pay close to or above the listing price. Home-buyers often have to bid and miss on 2 – 3 homes with multiple offers before they understand that they need to start with a strong offer.
2. Get the best financing. If you aren’t a cash-buyer, get a conventional loan if you can. Sellers, especially banks, aren’t that excited about FHA or VA loans.
3. Be the first one into the pool. Especially with bank-owned homes, come in with a strong bid late so you can get a feel for what other buyers have already offer and decide where to price yours.
4. Be patient. Multiple offer situations always take a while and if you’re dealing with a bank, they take even longer.

What are you experiences with multiple offers?

The Market Wrap-Up For July

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

Single-Family Homes

• 2,400 houses sold in July
• The median sales price was $350,000, down 12% from July 2008

Condos

• 1,132 condos sold in July
• The median sales price was $220,000, down 14% from July 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.

This is our first monthly report on the inventory trends in San Diego. What numbers would you like to see in our August wrap-up?

Case-Shiller: San Diego Price Drops Continue Moderation

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. – May data is released in July).

Before we dig into the data, I’d like to make a brief mention of an excellent post over at the economics website Calculated Risk: A Few Comments on Housing Reports. Quoting from his post:

…the Case-Shiller report today really bothered me. To be more accurate, the reporting on the Case-Shiller report bothers me. As I mentioned earlier today, there is a strong seasonal component to house prices, and although the seasonally adjusted Case-Shiller index was down (Case-Shiller was reported as up by the media) – I don’t think the seasonal factor accurately captures the recent swings in the NSA data.

Keep in mind that the Case-Shiller data that most of the media (including this blog) are reporting on is usually the raw index data. As CR mentioned, the housing market is a very seasonal beast, so it’s difficult to draw any meaningful conclusions from month-to-month changes, unless they are far outside the norm for that time of year. This is why we consistently report the year-to-year change in our summary.

Now that we’ve got that out of the way, here are the basic Case-Shiller stats for San Diego County as of May:

May 2009
Month to Month: Up 0.4% (raw)
Month to Month Down 0.3% (seasonally adjusted)
Year to Year: Down 18.5%
Change from Peak: Down 42.1% in 42 months

The following chart shows the San Diego HPI scaled such that the November 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Diego HPI was at or lower than it was in the latest data (July 2002).

(All of the charts below are based on the non-seasonally-adjusted Case-Shiller HPI data.)

Home prices in San Diego increased in May for the first time since June 2006. Of course, spring is usually a period of relatively strong home price gains, so it is probably premature to call the end of home price drops just yet. That said, the rate of YOY declines has been dropping since November’s data, so we’re definitely continuing on a trend of moderating declines.

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

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 also worth keeping in mind that in addition to being from a usually-strong time of year, these numbers represent home sales that closed during the frenzy of interest rates in the fours and the debut of the $8,000 first-time homebuyer tax credit. In my opinion, we won’t really know if home price declines are mostly over until we see the data from October / November. And that advice is worth exactly what you paid for it ;^)

Biggest Discounts July Update

Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in San Diego County and sorted it by zip code. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate dropped from May to June, moving from 2.9% to 2.3%. There also continues to be a definite trend of more expensive areas coming in with the largest discounts off list price, as seen in the next chart:

Here are the ten areas with the smallest discounts:

Of the 76 areas we ranked, twenty-three came in in with an average sale price above the average list price.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 2,985 sales we tracked in the 1-month period, 248 homes (8%) sold for 10% or more off the asking price, while 564 homes sold for 5% or more above the asking price.

Case-Shiller: 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 San Diego County as of April:

April 2009
Month to Month: Down 0.1%
Year to Year: Down 20.0%
Change from Peak: Down 42.3% in 41 months

The following chart shows the San Diego HPI scaled such that the November 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Diego HPI was at or lower than it was in the latest data (July 2002).

Prices continue to decline in San Diego, and a 20% 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 San Diego and LA is also continuing:

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare San Diego’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 San Diego 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.

June City/Neighborhood Price Reductions

Let’s take our monthly look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 38 cities/towns we ranked in the San Diego area this month, 12 had price-reduced ratios of fifty percent or more.

Getting a little more granular, let’s look at the top ten San Diego area neighborhoods for price reductions:

Of the 93 neighborhoods we ranked in the San Diego area this month, 12 had a price-reduced ratio of fifty percent or more. On average, the neighborhoods with more price reductions had noticably higher closed prices per square foot than those with fewer price reductions.

The general trend in San Diego looks to be heading slightly toward less price reductions, however every city and neighborhood is of course different. Some may be getting softer while others get tighter. Download the full spreadsheet to check where your neighborhood came in.

Biggest Discounts June Update

Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the chart below, we have taken all sales data from last month in San Diego County and sorted it by zip code. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount stayed the same in June from our previous update in April, holding steady at 2.9%. Much of the top ten list also stayed the same. If you’re looking for sellers that might be more likely to accept lower offers, these might be a good place to search.

Here are the ten areas with the smallest discounts:

Twenty-six of the seventy-six zip codes we ranked actually came in with average sale prices above the list price.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 2,778 sales we tracked in the 1-month period, 234 homes (8%) sold for 10% or more off the asking price, while 488 homes sold for 5% or more above the asking price.

Case-Shiller: San Diego Home Prices Creeping Toward a Bottom?

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, 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. – March data is released in May).

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

March 2009
Month to Month: Down 1.5%
Year to Year: Down 22.0%
Change from Peak: Down 42.3% in 40 months

The following chart shows the San Diego HPI scaled such that the November 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Diego HPI was at or lower than it was in the latest data (July 2002).

San Diego’s year-over-year price drops have been moderating now for five months. Both San Diego and Los Angeles are now clocking in with yearly declines of “only” 22%:

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

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.

Southern California definitely appears to be on the leading edge of the national real estate trends. With prices still falling over 20% in a year, it’s far too early to call this a sign of a recovery, but it could definitely be a sign of an imminent bottom. The question then becomes how long will we stay at that bottom?

Case-Shiller: San Diego Price Drops Continue to Slow

It’s time once again for our 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. – February data is released in April).

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

February 2009
Month to Month: Down 1.0%
Year to Year: Down 22.9%
Change from Peak: Down 41.4% in 39 months

The following chart shows the San Diego HPI scaled such that the November 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Diego HPI was at or lower than it was in the latest data (July 2002).

The rate of decline in San Diego resumed the moderating trend that began with November’s data. Both San Diego and Los Angeles climbed back up from 26-27% yearly declines to “just” 23-24% declines, as can be seen here:

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

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.

Price declines have been both swift and severe in San Diego since the peak, but it would appear that November’s data may have indeed been the first sign of an eventual stabilization. However, even if that is the case, the current rate of improvement would put home prices flattening out sometime in early 2011.