Case-Shiller: Simultaneous Summer Surge Skips Seattle

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. – July data is released in September).

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

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

While most other markets around the country have been experiencing a sharp uptick in prices as measured by the Case-Shiller index this summer, all that Seattle has managed to eek out has been a plateau. My personal guess is that many other markets had almost completed their natural correction before the various stimulus programs went into effect. Meanwhile, since Seattle was basically the last market to begin the home price correction, we still had a ways to go, so there is more resistance to prices increasing here just yet.

This theory is fairly evident in the chart below, in which you can see Seattle continuing to rise as other markets stalled out in 2005, moving from the bottom of the pack to the fourth-highest between late 2008 and earlier this year. Relative to other markets, it would seem we still have a ways yet to correct.

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.

I suppose this summer could be called the summer of the sudden surge or the summer of the massive desperate government intervention. Either way, the result has been increasing prices in most markets over the past few months. Potentially good news if you’re trying to sell your house, but not especially encouraging if you’re hoping to buy, but prices had not yet come down quite into your reasonable range yet. Whether the $8,000 first-time homebuyer tax credit expires or not, I think this winter will be interesting.

Here’s the flip side of the peak decline chart, the Great Summer Bounce of Aught-Nine:

Seattle’s exclusion from the party is especially evident in that chart.

Remember: All real estate is local. Except of course when the federal government throws billions of dollars into the market, I suppose. Then we get a nationwide sample of the best recovery that $700 billion plus $787 billion can buy!

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