Case-Shiller: Simultaneous Summer Surge Stretches On

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 DC 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.

After first dropping into double-digit negative territory back in January 2008, year-over-year price drops inched back up into the single-digits in DC in July. But will the losses continue to subside once the summer high wears off?

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:

It’s the best recovery that $700 billion plus $787 billion can buy!

*[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.]

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 177 cities/towns we ranked in the DC area this month, 95 had price-reduced ratios of fifty percent or more. The median price-reduced ratio was 50.2%.

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

Of the 74 neighborhoods we ranked this month, 23 had a price-reduced ratio of fifty percent or more. The median price-reduced ratio was 44.9%.

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

The Market Wrap-Up For August

Let’s take at look at the numbers for single-family homes and condos that sold between $100,000 and $5,000,000 in August in metro Washington, DC and see how they compare to a year ago.

Washington, DC

• 602 homes sold, up from 501 in August 2008
• The median sales price was $365,000, down from $395,000 in August 2008
• The average days on market for homes sold was 85 days, up from 80 days in August 2008
• On average, homes sold at 92.49% of the list price, in August 2008 it was 92.33%

Fairfax County, Fairfax City, Arlington County, Alexandria City & Falls Church City, VA

• 1,813 homes sold, up from 1,812 in August 2008
• The median sales price was $395,000, up from $389,000 in August 2008
• The average days on market for homes sold was 63 days, down from 87 days in August 2008
• On average, homes sold at 94.65% of the list price, in August 2008 it was 92.88%

Montgomery County

• 967 homes sold, up from 787 in August 2008
• The median sales price was $355,000, down from $408,000 in August 2008
• The average days on market for homes sold was 85 days, down from 99 days in August 2008
• On average, homes sold at 91.41% of the list price, in August 2008 it was 91.22%

Prince George’s County

• 638 homes sold, up from 430 in August 2008
• The median sales price was $216,500, down from $280,000 in August 2008
• The average days on market for homes sold was 133 days, up from 132 days in August 2008
• On average, homes sold at 88.33% of the list price, in August 2008 it was 89.89%

Greater Baltimore: Anne Arundel, Baltimore City & County, Carroll, Harford, Howard

• 2,144 homes sold, up from 2,047 in August 2008
• The median sales price was $250,000, down from $275,000 in August 2008
• The average days on market for homes sold was 120 days, up from 115 days in August 2008
• On average, homes sold at 90.65% of the list price, in August 2008 it was 91.41%

We pulled the numbers in this post from MRIS.

Dig Deeper Into the Trends

These numbers county-level trends. To see what’s happening in your neighborhood, check out our stats & trends pages.

What Other People Said

Keith’s posts at DC Home and Condo Prices are always insightful and a great place for people looking for data-rich analyses of the market. Check out his preliminary analysis of the August numbers.

Check out Annys Shin’s first-hand account in the Washington Post of selling her Petworth rowhouse and buying in Silver Spring.

What trends did you see in August?

46% of Offers Are On Homes With Multiple Offers

In August, our agents presented 63 bids on homes for sales and 29 of them, or 46%, were on homes with at least one other offer.

Marshall Park, the #2 ranked buyers’ agent in metro DC, is seeing a lot of multiple offer situations especially Falls Church and Fairfax:

Right now, homes in the $250,000 – $350,000 range that are priced well and show well are getting a lot of attention from buyers and going under contract quickly. Anything that is still on the market in this price range over 30 days is either overpriced or it doesn’t show well.

In previous years, the real estate market has cooled as the summer winds down and school starts. We’re not seeing that in the DC region this year and Marshall believes there are three reasons for this:

1. A lot of first-time buyers in the market hoping to buy before November 30th so they qualify for the federal tax credit
2. Sellers have a better understanding of the market and are pricing their homes closer to market value
3. Buyers have seen pretty much everything that’s for sale in their price bands and target neighborhoods, so when something nice gets listed it’s going to get a multiple bids

3 Tips For Buyers

Marshall has three pieces of advice for you anyone trying to buy a home in Northern Virginia:

1. Know what’s for sale: so you’re ready to pounce when you see something you like.
2. Bring your strongest offer: so sellers know you’re serious from the start. If you start too low, they might not even counter your offer.
3. Expect to bid on more than one home. Right now, it’s taking most buyers 1 -2 failed offers before they win one.

For more numbers, download the spreadsheet with the data on what happened in August.

Where else are you seeing multiple offer situations?

Our Agents Are In The Top 4% Of Buyers’ Agents

August was another great month for our DC-area agents. Of the 5,200+ buyers’ agents in the DC area who closed a deal in August, Marshall and Taylor are in the top ten and all of our agents are in the top 4%:

When you work with Redfin, you’ll be working with some of the best agents in the metro Washington, DC region. Our DC agents know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.

We pulled these numbers from MRIS, the database for real estate transactions and listings for metro Washington, DC region, and ranked agents who represented home-buyers of single-family homes and condominiums in August based first on number of deals, then by total dollar amount.

Our Clients Love Our Service

We survey every client and track every transaction in a central customer database. For the surveys we received in August from our clients in the metro Washington, DC area:

• 61 clients responded to our customer-satisfaction survey and posted a review online, up from 33 in July.
• 58 of those clients, or 95%, would recommend Redfin to a friend, up from 94% in June.

In these surveys, we ask customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.

First-Time Buyer Hoping To Get The $8,000 Tax Credit? You Have Three Weeks To Find A Home

The federal government is offering first-time home-buyers a tax credit of 10% of a home’s sales price up to $8,000. To qualify you must close on a home by November 30th; if you close on December 1st, you’re out of luck.

If you’re a first-time buyer in metro Washington, DC, you have just over three weeks left to find a home, make an offer and negotiate terms if you hope to close in time to get the $8,000 tax credit.

Close By November 13th

In a normal month, about 20% of closings slip from the last week of a month to the next. This number will almost certainly be higher in November due to the expected rush of buyers trying to get the tax credit and because November 30th falls on the Monday after Thanksgiving this year.

If you’re hoping to get the tax credit, you want to make sure you’ve closed before the week of Thanksgiving because it’s not a full work week:

• Thursday, November 26th: Turkey day. A day to give thanks and watch the Detroit Lions go for six Thanksgiving Day losses in a row.
• Friday , November 27th: Unofficial holiday. Everybody is recovering from their day of gluttony.
• Saturday & Sunday, November 28th & 29th: The banks aren’t open so you can’t close.
• Monday, November 30th: The last day to close and qualify for the first-time buyer tax credit. It’s going to be a goat rodeo.

To give yourself the best chance of getting the tax credit, plan on closing by November 13th. If you run into any problems during closing, you’ll have more than a week to work things out and still qualify for the tax credit.

Get An Offer Accepted By October 1st

Right now, it’s taking our DC-area clients an average of 43 days to close once they reach initial agreement on terms. This means if you want to close by November 13th, you need to get an offer accepted by October 1st. That’s a little more than three weeks away.

For more information, check out the Home Buyer Tax Credit FAQ from the IRS and get all the details about the tax credit from the agency giving the credit. Also, check out the report that this program may be extended.

Find A Home You Like

Don’t rush into a purchase. Make sure you’re buying because you’ve found a home you want to live in, not because you want the $8,000. You don’t want to end up in the wrong house in the wrong neighborhood with the wrong commute just for a few thousand dollars.

Biggest Discounts (Belated) August Update

I apologize for the tardiness of this post. Unfortunately I did not receive the data until almost the end of the month.

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 greater DC area 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 twenty 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 slightly from June to July, moving from 3.1% to 2.9%.

Here are the ten areas with the smallest discounts:

In the 108 areas we ranked, the median discount was 2.58%.

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 8,106 sales we tracked in the 1-month period, 249 homes sold for 5% or more off the asking price, while just 15 homes sold for 5% or more above the asking price.