Case-Shiller: Washington Home Prices Still Looking for Bottom

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 DC area* as of November:

November 2008
Month to Month: Down 2.4%
Year to Year: Down 19.4%
Change from Peak: Down 28.1% in 30 months

The following chart shows the DC HPI scaled such that the May 2006 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the DC HPI was at or lower than it was in the latest data (April 2004).

DC’s Case-Shiller HPI has been declining at a highly uniform rate for the last three months, and since we’re heading into winter with this data update, it may even speed up over the next few months.

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

DC’s HPI continues to come in higher than any other Redfin market, indicating the most overall price growth since 2000, for whatever that’s worth.

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.

DC is still tracking fairly closely to the ground covered by price drops in San Diego six months prior, putting it as one of the more rapidly-declining markets. Great news for homebuyers looking for a deal lately, if you can stomach the possibility of further declines. With this latest data, price declines still do not appear to be approaching a bottom.

*[Case-Shiller defines Washington DC as the entire Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area, which includes all of the District of Columbia and all or part of the following counties: Calvert MD, Charles MD, Frederick MD, Montgomery MD, Prince Georges MD, Alexandria City VA, Arlington VA, Clarke VA, Fairfax VA, Fairfax City VA, Falls Church City VA, Fauquier VA, Fredericksburg City VA, Loudoun VA, Manassas City VA, Manassas Park City VA, Prince William VA, Spotsylvania VA, Stafford VA, Warren VA, and Jefferson WV.]

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 243 cities/towns we ranked in the DC Area this month, 203 (84%!) had price-reduced ratios of fifty percent or more. Only Langley Park has consistently been in the top ten for the last three months. It is also worth noting that the cutoff for the top ten moved up a few percentage points this month, from 69% last month to 71% this month, indicating that overall there seem to be more price reductions.

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

62 of the 148 neighborhoods we ranked in the DC Area had a price-reduced ratio of fifty percent or more. Congress Heights, Trinidad, and Trinidad / Arboretum / Ivy City have all made the top ten 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.