Case-Shiller: Seattle Price Drops Still Playing Catch-Up

I apologize again for the multi-week radio silence here. We’ve revamped our data delivery to be able to better streamline the whole process, and from now on there will be a regular schedule of in-depth data in this space. For now though, it’s time 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. – November data is released in January).

Here are the basic Case-Shiller stats for the Seattle area* as of November:

November 2008
Month to Month: Down 2.5%
Year to Year: Down 11.2%
Change from Peak: Down 13.6% in 16 months

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 (January 2006).

With last month’s drop in Seattle’s Case-Shiller HPI, prices have now effectively “rewound” just under three years.

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.

Of the seven Case-Shiller-tracked markets that Redfin serves, Seattle’s rate of decline since the local peak in home prices continues to be exceeded only by Los Angeles. Of the entire 20 cities tracked by Case-Shiller, only five cities—Miami, LA, Las Vegas, Atlanta, and Tampa—had experienced a larger overall drop at this point in their respective declines. Seattle’s relatively rapid price drops have price trends here quickly catching up to other major cities across the country.

*[Case-Shiller defines Seattle as the Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area, which includes all of King, Pierce, and Snohomish counties.]

January 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 (saved in Excel 97-2003 .xls format by request). In order to keep from overwhelming you with charts, I am leaving out the top ten cities/towns/neighborhoods with the least reduced-price listings from the post, but you can still see that chart in the downloaded file.

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

Of the 139 cities/towns we ranked in the Seattle area this month, 102 (73%) had price-reduced ratios of fifty percent or more. Only East Renton Highlands made the top ten for each of the last three months.

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

83 of the 122 (68%) neighborhoods we ranked in Seattle area had a price-reduced ratio of fifty percent or more. On the neighborhood level, only Cascade View made the top ten list for three months in a row.

For home buyers, cities and neighborhoods that consistently remain near the top of the list for price reductions may be a good place to potentially hunt for bargains. Once a home has been on the market a while, many buyers tend to overlook it, even though a price reduction or two may have brought it into a more desirable price range.