Case-Shiller: Still No Bottom in Sight for DC Home Prices

It’s time once again 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. – December data is released in February).

Here are the basic Case-Shiller stats for the DC area* as of December:

December 2008
Month to Month: Down 2.3%
Year to Year: Down 19.2%
Change from Peak: Down 29.8% in 31 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 (March 2004).

According to the Case-Shiller index, as of December home prices in DC have “rewound” just short of five years. While December’s month-to-month drop was large, it just fell short of setting a new record.

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:

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.

Home price drops in DC continued at a steady pace in December, putting DC’s total drop 31 months since the peak at just about the same spot as San Diego. So far there is still no sign of a bottom in DC prices.

*[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.]

February 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 228 cities/towns we ranked in the DC area this month, 176 (77%) had price-reduced ratios of fifty percent or more. Only Beltsville carried over from last month’s top ten to this month.

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

Of the 130 neighborhoods we ranked in DC area this month, 60 (46%) had a price-reduced ratio of fifty percent or more. On the neighborhood level, slightly more of the top ten list remained the same, with Hampden taking the top spot two months in a row.

At the neighborhood level, there is definitely some consistency in the number of homes seeing price reductions. If finding a good deal on a home is important to you, these neighborhoods might be a good place to start, as higher ratios of reduced-price homes indicate sellers that need to sell and are willing to lower the price to do so.

Open House: 2BR Ballston Townhome

Open House Dates and Times:

Sunday, February 22nd, 1-3pm

4531 11th St North
Arlington, VA 98005

Seller Comments

Coffee Shop of Choice:
Starbucks–3 within walking distance and 2 COSIs.

Favorite Restaurant in the Area:
Liberty Tavern, Tallula, Rio Grande, PF Changs and Vapiano.

Favorite Places to Go:
Park across the street and down by the library at the end of 11th (six blocks), movie theatres—also walking distance and bike path—Custis Trail. There are also several Farmer’s Markets nearby.

Best Features of the Home:
I have always loved the larger bedroom with cathedral ceiling and skylights. It is always bright and cheery. I also love the remodeled kitchen with gorgeous granite countertop that I picked out myself at the granite yard.

Has there been any remodeling since you purchased the home?:
Yes. No room has gone untouched.

Favorite Room:
Kitchen and Bedroom with the loft.

What’s in the neighborhood?:
Bike paths, Metro, Ballston Mall, great restaurants. I am looking to move into a bigger home in the same location. Easy to get into DC or out to Tysons. I have worked in both locations in addition to Bethesda from this home.

What you will miss most:
My granite countertops and loft space.

Biggest Discounts February Update

Let’s have an update on where buyers are currently getting the biggest discount off the asking price. Our goal in sharing this data is to help potential buyers to know which neighborhoods are softer in terms of sale price discounts off list price, to better equip you when making an offer, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from the last two months in Redfin’s Washington DC coverage area and sorted it by zip code. 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 zips 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 zip codes with the largest overall discount:

The Great Falls area (22066) fell from #1 to #2 this month. Meanwhile, the area-wide discount increased slightly from 3.6% in December to 4.0% at the end of January.

Here are the ten zip codes with the smallest discounts:

Of the 3,607 sales we tracked in the 2-month period, just 33 homes sold for 20% or more off the asking price, while 626 homes sold for more than asking. As a whole, the average trend in DC continues to move toward larger discounts for most neighborhoods.