Case-Shiller: Home Prices Drop 10% in a Year
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 the Seattle area* as of October:
October 2008
Month to Month: Down 1.4%
Year to Year: Down 10.2%
Change from Peak: Down 11.4%
The following chart shows the Seattle HPI scaled such that the July 2007 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Seattle HPI was at or lower than it was in the latest data (March 2006).
Price declines in Seattle have continued at roughly the same pace that they increased on the way up, with October’s drop bringing prices back one more month into the first quarter of 2006.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare Seattle’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.
Seattle has been declining the least amount of time of all the markets Redfin serves, but continues to see larger respective post-peak price drops than every market but Los Angeles. The current rate of price declines in Seattle seems to match somewhat closely to where Washington, DC was at this point in their decline. DC has now seen total declines of over 25% since their peak.
Home price declines here in Seattle are definitely not as extreme as those in southern California. However, prices are still dropping at a near-record rate for this area, and as of yet are showing no signs of slowing down soon. If Seattle home prices continue to follow close to the pattern of the other markets around the country that peaked earlier, home sellers will be in for a rough 2009, while home buyers will be sitting pretty.
*[Case-Shiller defines Seattle as the Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area, which includes all of King, Pierce, and Snohomish counties.]
