Case-Shiller: Effects of Tax Credit Appear to be Waning

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Keep in mind that all of the charts in this series of posts are based on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted data, hit the S&P/Case-Shiller website (requires free registration). 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. – September data is released in November).

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

Eleven of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between August and September (down from sixteen in August). New York, Boston, Charlotte, Seattle, Dallas, Portland, Tampa, Las Vegas, and Cleveland all marked seasonally-adjusted drops month-to-month.

Here’s a look at Seattle’s latest tiered data, back through 2000:

All three tiers in Seattle declined in September, as whatever small effect the tax credit was having seems to have already worn off, even a good two months before the credit was originally set to expire.

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.

Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:

Seattle still seems to stand out quite a bit in that last chart. I guess we weren’t done declining, tax credit or not.

With the tax credit having been extended until the spring, and pretty much all the benefit having been squeezed from low rates and tax giveaways, it seems likely that we will see some price deterioration in the next few months as we head through winter. Beyond that is anybody’s guess.

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