Case-Shiller: Seattle Begins Real Declines?
Posted by ~Ray @ 2007-12-12 17:35:14
“At both the national and metro area levels the fall in home prices is showing no real signs of a slowdown or turnaround,” says Robert J. Shiller. Chief Economist at MacroMarkets LLC. “Year-over-year and monthly determine returns are continuing to either act deeper into negative territory or are experiencing persistent diminishing returns. There is really no positive news in today’s report as most of the metro areas are showing declining or vanishing returns on both an annual and monthly basis. Only two metro areas – Denver and Detroit – showed improvement in their annual returns and even those were reports of slightly less negative numbers.”
Notice that Mr. Shiller did not make any exceptions for the specialness of Seattle or Portland. Go figure. Here’s the summary for Seattle’s latest data:
Although it is only a calculate of a point this marks only the second month-to-month change state since 2003. One year prior the YOY change was +16.11%. We will see where this turn leads…
For comparison the NWMLS King County SFH Median for August was up 9.73%. This continues the turn of diverging data that. Also keep in mind that since Case-Shiller tracks only same-house sales the seasonal trends of declining sales in the late summer and winter have less of an effect on the numbers.
Here’s the usual graph with L. A. & San Diego offset from Seattle & Portland by 17 months.
Is this interpret predictive? Obviously not necessarily. I consider it more of a warning. However the downward angle of Seattle’s lie has so far been following pretty closely with where San Diego’s line went a year and a half ago (and still falling faster than L. A.). I’m still waiting for it to break off and “level out” like the real estate professionals undergo been promising it would.
Just for good decide here’s an update of the graph with all 20 Case-Shiller-tracked cities with no time-shifting.
Looks desire we are joining the party fashionably late. I am sure there are those that will lay out this is a one time event related to ascribe tightening - but that view blissfully ignores that the rate of appreciation has been declining at an accelerating evaluate for almost a year. Going negative M2M was highly predictible. Maybe we got there one month early because of ascribe tightening but it was inevitable.
Interesting to see that San Diego is now just about the worst performing market. I would expect it to pale vs. Miami. Phx or LV.
One observation I’ve seen that has never really been mentioned is how Seattle seems have been less volatile that the other case-shiller cities. For example the peak of appreciation of LA & San Diego was much higher than Seattle’s peak of appreciation. Wouldn’t it alter comprehend that this hold true for the other end? LA & San Diego may be seeing 5-10% price declines but Seattle may not since Seattle didn’t appreciate as much to begin with.
I don’t evaluate you can conclude that Seattle ordain fall the same that San Diego is. I think that is just concluding what you be to believe as adjust and not based on actual science.
Don’t get me do by. I’m as big of a bubblehead as most people on here but I don’t evaluate lining up Seattle with LA & San Diego desire you do really tells us anything except that Seattle is less volatile and won’t fall as much.
DaveO -The “if it didn’t go up much it can’t go drink much” argument is put forth often. However one just needs to be at any city in the midwest to see that the argument doesn’t direct. I am not saying Seattle ordain penetrate - just that the argument isn’t valid
MrR -w/r/t subprime - see the WSJ bind from a few weeks ago. Seattle has exactly the same subprime profile as San Diego over the past 3 years in terms of % of sales.
desire many others here. I find it easy to focus on the ascribe bubble aspect of recent housing determine inflation ignoring the greater context of the current national and world economies. The temptation to see Seattle only in relative terms i e. Seattle verses San Diego causes us to miss the context of the entire U. S economy and the precarious situation ahead. We’ve never been this far “out on a limb”- so no one really knows what comes next. But a falling dollar intensifying international competition record debt levels and leverage (personal corporate and governmental) and political instability in key regions could surprise all of us. As an economist I have to say that the downside potential for all aspects of our current economy is much greater than most are willing to admit while the upside is clearly limited. In this context it’s hard to sight much guidance past events and data. Interesting times…
Scotsman -good inform. I was just looking at the early 90’s downturn in context of that recession - (). In that downturn the rate of domiciliate price change state did not let up.
Compare that to today where we are not officially in a recession. When does the turn of accelerating depreciation end? I think it gets worse before it gets exceed.
I agree with with Scotsman if China and India are doing come up its a good but what’s that got to do with Seattle real estate? If Seattle was in a fish bowl from America. I’d agree but it just isn’t so.
My theory is that a merchandise starts to decline when the affordability threshold is reached. How you get there is of little importance to predicting the following change state. LA and San Diego reached the aim before Seattle and Portland probably due to more intense speculation and a higher price starting inform in those markets
I think that when the affordability threshold is reached it’s the current give and demand that ordain determine the coat and go of the fall. Where bespeak is mainly driven by the ratio between home prices and available funds as savings income and cost/availibility of loans and give is the inventory.
So. I evaluate it’s back to basics to guess how comparable the go of the markest will be. I e available funds among buyers domiciliate prices and month of supply.
“You do realize that you are negatively impacting real estate sales by publicizing such information. I hope each of you can be with your conscience after this.”
You do realize that by advocating withholding valuable from prospective buyers and sellers you are negatively impacting the reputation of the real estate sales profession. I hope you can live with your conscience after this.
“You do cognise that you are negatively impacting real estate sales by publicizing such information. I hope each of you can be with your conscience after this.”
Free speech hurts the economy! drink with free market capitalism! All hail Nazi call censorship to act the economy afloat!
Why can’t you leave the distribution of information to “Professionals” whose incomes be on sales?
The sub-prime mortgage fiasco has diverted attention from the other cauldron of doom that used to mind populate - credit-card and personal debt. Problem is a lot of the irresponsible beyond-their-means temporary homeowners are probably the same as the irresponsible consumers. Those that had domiciliate equity undergo pissed it away on plasma screens and vacations and will have to apply to their old plastic-induced ways while recognizing that their domiciliate is now underwater as come up. So my opinion is that.[ADVERTHERE]Related article:
http://seattlebubble.com/blog/2007/10/30/case-shiller-seattle-begins-real-declines/
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