Comments on: Case-Shiller: Seattle Home Price Drops Not Done Yet

By: Mark

Mark — Thu, 14 May 2009 15:19:21 +0000

No, not a realtor. Planning on buying and I visit Redfin a lot.

Look – I tried to let everyone know that Tim was comparing Seattle in July 2007 with San Diego in 2005. July of 2007 was the worst price drop in history and somehow that means Seattle is dropping ‘relatively rapidly’ and needs to ‘catch up’. Tim has concluded that the individual peaks are related, and we should be able to move graphs to be able to predict future trends. You can’t do that with stocks that fall in a bubble, and you can’t do it with other markets, including real estate.

Anyway, I dropped it. It’s Tim’s forum.

By: Buyer on the Sidelines

Buyer on the Sidelines — Thu, 07 May 2009 00:51:36 +0000

Mark is definitely a realtor. I’ll put money on it.

By: Tom

Tom — Mon, 04 May 2009 13:53:49 +0000

Thanks for the data, Tim. Any bets Mark is a realtor?

By: Tim Ellis

Tim Ellis — Thu, 30 Apr 2009 15:34:31 +0000

Mark, it seems like you’re reading things into the post that aren’t there. I was just pondering a possible explanation for why Seattle’s line in that last chart would be over 5 percentage points below the Composite-20 line (“the rest of the country”) as of Seattle’s latest update.

It is a fact that prices in Seattle have declined faster since the peak than they did in most other markets tracked by Case-Shiller. I do not expect that will continue, but one possible explanation for why it has happened would be that we are “catching up.”

Although Seattle’s decline has been going on for less time than all but 2 markets (Portland’s is also at 19 months and Charlotte is at 18) our 21% total drop from the peak is already larger than five other markets that began declining before us.

So we are already “catching up,” but that does not mean we are currently declining faster than any other market.

By: Mark

Mark — Thu, 30 Apr 2009 15:22:27 +0000

When you said the following:

we have more ground to cover in a shorter amount of time in order to “catch up” to what’s happening in the rest of the country.

If you didn’t mean we were catching up now (currently) and were declining faster than others, what did you mean?

By: Bubbles & Behavior: Highlights From Robert Shiller’s Talk | Redfin Seattle Sweet Digs

Thu, 30 Apr 2009 14:11:46 +0000

[...] Sweet Digs « Case-Shiller: Seattle Home Price Drops Not Done Yet April 30, [...]

By: Tim Ellis

Tim Ellis — Thu, 30 Apr 2009 13:59:02 +0000

Mark, since the only instances of the words “current” or “currently” on this page are from your comments, I wonder if you could clarify what I said that you interpreted to mean “Seattle is falling faster than other markets at the present time.”

By: Mark

Mark — Thu, 30 Apr 2009 10:44:07 +0000

Tim – you did say currently. You said we were going to catch up to the other markets – which means we are declining faster (right now). There’s no other way to catch up.

When I look at the last 19 months, most cities have had a faster rate of decline than Seattle. Given this fact, do you still think we’re going to catch up?

By: Tim Ellis

Tim Ellis — Thu, 30 Apr 2009 05:09:20 +0000

RE: Mark @ 11:04 AM –

Right – you can’t do that and conclude one market is *currently* falling faster than another market. The only way to determine that is to look at what they are doing now.

I don’t think I said that Seattle was currently falling fifth-fastest. I was just comparing the speed of the declines in each market since the peak. Sorry if I wasn’t clear about that.

By: Tim Ellis

Tim Ellis — Thu, 30 Apr 2009 05:02:40 +0000

Clint, I used the wrong terminology in my comment above. The percentages quoted are in fact the compounded monthly rate, not the straight averages, for the reason you state.

The formula for calculating compounded growth (or decline) rates is actually fairly simple:

{ ([End Value] / [Start Value]) ^ (1/[# Periods]) } – 1

It’s even easier when I just plug the numbers all into the handy Excel spreadsheet I created for doing this exact calculation.

Anyway, I apologize for the confusion.