Case-Shiller: Seattle Plateaus While Other Markets Spike

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Starting this month, we will be basing all of the charts in this series of posts on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-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. – August data is released in October).

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

Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between July and August. Only Cleveland, Las Vegas, Charlotte, and Seattle marked seasonally-adjusted drops month-to-month.

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

Looking at the seasonally-adjusted Case-Shiller tiered data, the low tier did inch up a bit in August, but the middle and high tier both fell. Given that much of this summer’s “bounce” (more of a plateau here in Seattle) has been attributed to the $8,000 tax credit available only to first-time buyers, it is not surprising to see slightly more strength in the low tier.

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%:

According to a Reuters story from earlier today, Robert Shiller has described the sudden spike seen in many markets this summer as potential “bubble territory.” I agree. As I have discussed on these pages in recent months, the sudden and simultaneous nature of this price uptick does not bear any marks of a return to fundamentals, but instead seems to be driven almost entirely by a mad dash for cheap loans (interest rates in the 5s) and free money ($8k tax credit).

I’m a little bit concerned that by interrupting the natural correction of the housing market, recent government intervention is setting us up for even more pain down the road. I hope I am wrong.

Fortunately, since Seattle seems to have missed out on this summer’s mini-frenzy, we may be avoid the worst of the pain, should it come to that.

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

Where Were the Biggest Discounts in August?

Let’s check in on our stats to find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in the Seattle area (King/Snohomish/Pierce) and sorted it by city.

Methodology
In order to maintain consistency with the automatically generated statistics posted to the Redfin neighborhood pages, we have slightly tweaked the way the statistics are compiled for this post series. First, we complied a list of every sale that took place in the month, calculating each sale’s sale-to-list ratio (based on the final list price). Next, we simply take an average of every individual sale’s sale-to-list ratio to calculate an entire area’s sale-to-list ratio. Any sales that came in with a sale-to-list ratio above 150% or below 50% are excluded from the calculation, and areas with fewer than twenty sales are excluded from the top and bottom ten rankings. Interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate was obviously lower than our last update, but since we tweaked the methodology slightly, unfortunately they’re not really comparable.

Here are the ten areas with the smallest discounts:

In the 35 areas we ranked, the median discount was 2.05%.

Here’s the bonus graph, showing the discount off the original list price:

Looks like there are definitely still some sellers out there that are overestimating the current moderate strength in the market when they first list their house.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 3,267 sales we tracked in the 1-month period, 691 homes sold for 5% or more off the asking price, while 102 homes sold for 5% or more above the asking price.

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.]

September City/Neighborhood Price Reductions

It’s been a while since we had a 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. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

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

Of the 95 cities/towns we ranked in the greater Seattle area this month, 61 had price-reduced ratios of fifty percent or more. The median price-reduced ratio was 52.1%.

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

Of the 109 neighborhoods we ranked this month, 47 had a price-reduced ratio of fifty percent or more. The median price-reduced ratio was 47.7%.

Download the full spreadsheet to check where your neighborhood came in.

Biggest Discounts (Late) August Update

Let’s check (a rather bit late) in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in the Seattle area (King/Pierce/Snohomish) and sorted it by city. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate increased slightly from June to July, moving from 3.5% to 3.6%.

Here are the ten areas with the smallest discounts:

In the 52 areas we ranked, the median discount was 3.2%.

Here’s the bonus graph, showing the discount off the original list price:

The overall discount off the original list price also increased, from June’s 8.7% to 9.0% in July.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 3,773 sales we tracked in the 1-month period, 862 homes sold for 5% or more off the asking price, while 98 homes sold for 5% or more above the asking price.

Case-Shiller: Seattle Flat While Rest of Nation Bounces Up

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. – June data is released in August).

Here are the basic Case-Shiller stats for the Seattle Area* as of June:

Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between May and June. Only Las Vegas, Detroit, Seattle, and Charlotte still saw seasonally-adjusted drops month-to-month. Hmm.

It is somewhat odd that even though most of the cities tracked by Case-Shiller have turned sharply upward since March or April, Seattle has more or less been flat. I’m not entirely sure what to make of that, since I thought our local economy was supposed to be stronger than the rest of the country… right?

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.

It’s quite noticeable in both of the above charts that almost every city we’re tracking seems to have taken a sudden upward turn with the most recent few months of data. Despite the fact that there was a nearly two year spread in when the various markets hit their peak (Boston in September 2005, Seattle in July 2007), nearly every market appears to have turned a sharp corner to the positive after “bottoming” in March or April.

A commenter over on Seattle Bubble made an astute observation about this phenomenon this morning:

Since it is still essentially true that “real estate is local”, what could cause every city to suddenly and simultaneously reach an equilibrium point where prices reversed course?

Answer: it just so happens that the home buyers’ tax credit was enacted with the American Reinvestment act (stimulus package) effective February 17, 2009. March 2009 was the first full month that American home buyers had the tax credit as an incentive. It changed their behavior and made them buy homes. It also expires on December 1, 2009 unless it is extended.

Once again, government policy is impacting asset valuations. Either we’re seeing a lasting nationwide housing bottom marked by an extraordinarily well-timed tax incentive, or a new “bubblet.” Case Shiller won’t tell us which until 2010.

It remains to be seen whether the NAR’s lobbying efforts to get the $8,000 tax credit extended beyond November will be successful. And even if they do convince Congress to extend it, the effect may be largely diminished. The program may have already pulled forward as many sales as it can during its spring and summer run.

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

Case-Shiller: Seasonal Home Price Bump Turns Flat in May

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. – May data is released in July).

Before we dig into the data, I’d like to make a brief mention of an excellent post over at the economics website Calculated Risk: A Few Comments on Housing Reports. Quoting from his post:

…the Case-Shiller report today really bothered me. To be more accurate, the reporting on the Case-Shiller report bothers me. As I mentioned earlier today, there is a strong seasonal component to house prices, and although the seasonally adjusted Case-Shiller index was down (Case-Shiller was reported as up by the media) – I don’t think the seasonal factor accurately captures the recent swings in the NSA data.

Keep in mind that the Case-Shiller data that most of the media (including this blog) are reporting on is usually the raw index data. As CR mentioned, the housing market is a very seasonal beast, so it’s difficult to draw any meaningful conclusions from month-to-month changes, unless they are far outside the norm for that time of year. This is why we consistently report the year-to-year change in our summary.

Now that we’ve got that out of the way, here are the basic Case-Shiller stats for the Seattle area* as of May:

May 2009
Month to Month: Down 0.3% (raw)
Month to Month Down 0.8% (seasonally adjusted)
Year to Year: Down 16.6%
Change from Peak: Down 22.5% in 22 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 (May 2005).

(All of the charts below are based on the non-seasonally-adjusted Case-Shiller HPI data.)

Fourteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective raw HPIs in May. Joining Seattle in continuing declines were Tampa, Los Angeles, Miami, Phoenix, and Las Vegas.

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 our final 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.

It’s also worth keeping in mind that in addition to being from a usually-strong time of year, these numbers represent home sales that closed during the frenzy of interest rates in the fours and the debut of the $8,000 first-time homebuyer tax credit. In my opinion, we won’t really know if home price declines are mostly over until we see the data from October / November. And that advice is worth exactly what you paid for it ;^)

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

Biggest Discounts July Update

Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in the Seattle area (King/Snohomish/Pierce) and sorted it by city/town. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate dropped from May to June, moving from 4.1% to 3.5%. Kirkland dropped completely out of the top ten, falling from 11.1% off in May to 9.8% in June. Mercer Island moved up from #2 to #1.

Here are the ten areas with the smallest discounts:

Of the 52 areas we ranked, only Lake Stevens came in in with an average sale price above the average list price.

Here’s an added bonus. The following chart shows the top ten areas with the largest overall discount from the original list price, instead of the final list price:

Technically, Mercer Island’s average discount off original list was far higher than shown above, but the stat was being massively skewed by a single sale that was originally listed just under $30 million, but sold for “just” $15.6 million, which I removed from the data set.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 3,507 sales we tracked in the 1-month period, 216 homes (6%) sold for 10% or more off the asking price, while 93 homes sold for 5% or more above the asking price.

Case-Shiller: Seattle Home Prices See Small Seasonal Uptick in April

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. – April data is released in June).

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

April 2009
Month to Month: Up 0.2%
Year to Year: Down 16.8%
Change from Peak: Down 22.3% in 21 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 (May 2005).

We pointed out last month that 2008’s April bump might be repeated again this year, and what do you know—it was. Nothing too surprising or noteworthy here. If prices keep rising through the spring and into the summer, then maybe we’ll have the beginnings of a bottom.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare the Seattle area’s performance to other areas across the country:

To recap, we have seen the following interventions in recent months meant to boost the housing market:

• $8k first-time buyer tax credit
• 4.5% – 5% mortgage rates
• various moratoriums on foreclosures
• numerous federal programs encouraging loan workouts

The apparent result of this host of actions has been a flattening to very slight upticks seen in the chart above, in a month that is historically one of the strongest of the year for the real estate market. I guess you can color me underwhelmed.

And here’s our final 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.

So far, we have yet to see any convincing evidence that Seattle’s home price drops are nearing an end. Of course, we’ll keep watching this and other metrics to keep you informed about the first signs of a bottom.

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

June 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. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

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

Of the 134 cities/towns we ranked in the greater Seattle area this month, 81 had price-reduced ratios of fifty percent or more.

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

Of the 104 neighborhoods we ranked in the greater Seattle area this month, 45 had a price-reduced ratio of fifty percent or more. On average, the neighborhoods with more price reductions had noticably higher median closed prices than those with fewer price reductions.

The general price reduction trend in the greater Seattle area looks to be generally holding steady, however every city and neighborhood is of course different. Some may be getting softer while others get tighter. Download the full spreadsheet to check where your neighborhood came in.