The S&P/Case Shiller® composite index (graph here) for the month of February was released today.
"'While the declines in residential real estate continued into February, we witnessed some deceleration in the rate of decline in some of the markets,' says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. 'All 20 metro areas recorded a monthly decline in February, but 16 of the 20 metro areas saw an improvement in their monthly returns compared to January. Nine of the 20 metro areas showed improvement in their annual returns compared to their returns in January. Furthermore, this is the first month since October 2007 where the 10- and 20-City Composites did not post a record annual decline. We will certainly need a few more months of data before we can determine if home prices are finally turning around.'
. . .
Cleveland, Charlotte, New York and Washington were the only MSA’s showing larger declines in home prices in February compared to January’s report".
26 comments:
Tiered index for DC showed much of this drop came from the high end. Mid and low end didnt crash nearly as hard as they have been recently (although still down)...
Low Mid High Agg
J 161.4 168.46 175.43 171.97
F 158.9 165.5 170.57 168.02
zerodown,
a longer time frame comparison would be nice, but I'm too lazy to download the files and graph them.
One caveat to the monthly declines by tier. I learned from Rich Toscano's blog a few week's back that the tiers are not some constant classification of houses, but rather are the bottom third, middle third, and top third of closed sales that counted towards the C-S index. Thus the 2.7% decline MoM for the top tier relative to the 1.7% and 1.5% declines in the mid and bottom tier could be over-interpreted, given that like a median, the mix of homes sold also matters. Thus in extreme cases like San Diego the bottom edge of the top tier has plummeted even faster than the top tier's price index has...
So, I wouldn't get too excited yet. This could just be what we've been seeing all along of incredibly sluggish sales in the upper tier.
Why graph it yourself when you can use the Paper Money graphing tool?
Liv Sining,
Sweet!!! I had found that before and totally forgotten about it! This time I'm bookmarking it...
In the Washington area, we've now had 6 months of monthly declines greater than 2%. And the previous winter, the fairly large monthly declines really didn't fizzle out until the May report.
Anyone who might have theorized in August 2008 that that month's relatively small drop was a sign that we were nearly done in this area, WAS SPECTACULARLY WRONG.
Anyone who said back then that "WE'RE JUST GETTING STARTED", was VERY RIGHT.
In specific units of housing I'm interested in (new or newly redone condos in good areas in downtown DC or very close in), I'm now seeing some dropping their prices 1-2% a month.
And Case Schiller is removing around 1 month of prior price gains per month, back to around Jan 2004 now in this area.
It really got rolling right when the economy and confidence got bad in October (and the stock market crashed, and so did McCain's campaign.)
I wonder if a turn in any of these can really get going by the end of the year, and whether that will at all stop or reverse the big slump here?
Me, I just renewed a 6 month rental, and am prepared to wait for a place with granite and hardwoods going for $350-375/sqft.
http://uzhas.blogspot.com
some nice comments on the stress tests, etc. contrarian will definitely rejoice reading them.
scott,
yeah, maybe we'll get there. right now it seems that the going price is still around $450/$500 per sqft. what are your observations?
Hey Scott,
An acquaintance of mine is moving here and looking at condos in nice areas of DC for the under $300k range. Any words of wisdom, or links to more DC specific info (like what we have with the MRIS in NoVa)?
Thanks!!!
Cara,
Dc housing prices blog is a rather decent source, it is on the front page of harriet's blog.
Cara,
And it is probably impossible to get anything better than a studio for the under-300k now in nice areas (at least i have not seen any deals like that).
Wrong. Just the other day I saw a 1BR Adams Morgan condo on FranklyMLS for about 308.
konstantin,
it depends on what you mean by nice. Everyone has different standards, but my friends looked at over a dozen 1 bedrooms this past weekend all around or under $300k.
Heck there's a tiny 1 bedroom facing the wrong direction in the Navy Memorial building for $302k
http://franklymls.com/DC6967374
Not that best in the building by any stretch, but not too shabby either.
well,
i've seen some, but they are mostly coops, which are usually priced cheaper than condos.
ivan,
i kinda thought, that 308k is not exactly under-300k, right?
to clarify: i actually expect that you have central air in the condo, and washer/dryer in the unit. hate to clean other people's hair out of my clothes. this requirement removes a lot of units (basically all the old, non-renovated stuff) from consideration. and that's a shame, since many of these places are just gorgeous from outside, like ones in 16th street area.
Cara,
and that place you are showing is 520 sqft, not exactly large, with a $440 monthly condo fee (horror! horror!) and no parking included. otherwise nice, just very small and expensive.
What? It does too have parking included. It says 1 assigned space in the garage.
The $440 condo fee needs to be in the rent-versus-own equation, but it may or may not be extravagant compared to real condo reserves needed and maintanence.
I didn't say it was at $350 per square foot, just that it wasn't a studio. I just like that building a lot because a different friend of mine rents one of the really nice ones there (that faces the mall).
What I'm looking for is people's opinions on, are things like this going to keep going down in price? This not being where I've looked I have a hard time advising someone else.
Cara,
Not so sure about garage, it says extra per month in the top section and something somewhat less clear in the details on garage.
Building is nice, been there, loved it. View is perfect (on the mall side).
Pricewise --- i have a feeling that averages do not move at all there. And i will not be surprised if this price is about rental parity now, even considering huge condo fee (whatever their needs are, that's a lot on top of a mortgage for such a small place).
"Scott said...
Anyone who might have theorized in August 2008 that that month's relatively small drop was a sign that we were nearly done in this area, WAS SPECTACULARLY WRONG."
Scott - just so you know, it turns out there is a seasonal aspect to CS prices that we were picking up on. Prices are up in the summer, down in the winter.
If this YOY abatement continues, there is a chance prices will go up (MOM) this summer.
If that happens and you want to know if the gains are real or just a seasonal headfake, CS now publishes a seasonal index too.
http://www2.standardandpoors.com/spf/pdf/index/SA_CSHomePrice_History_042841.xls
We see YOY abatement here too, but at least we dont have to worry about seasonality with this one.
YOY abatement? More like we're hitting terminal velocity:
September 2008 -0.207
October 2008 -0.226
November 2008 -0.238
December 2008 -0.235
January 2009 -0.238
February 2009 -0.235
Novawatcher - maybe I am confusing you with my terminology. All I am noting is that the MOM rate of burn down last year (per harriets data) has lessened the last 2 months.
Jan 08 -2.36%
Feb 09 -2.04%
Jan 09 -2.46%
Feb 09 -2.30%
Hence as per harriets graph, the rate of YOY burn down as the older higher numbers dropped out and the newer smaller decline numbers came in. Thus, the YOY decline went from
Dec 08 -19.6%
Jan 09 -19.3%
Feb 09 -19.2%
We see the same thing in the seasonal index, except that since the seasonal swings arent as big, we may not have been faked out by that seasonal lessining of MOM numbers.
The Anon--
I'm quite aware of the seasonality, the tendency for prices to have more support in the late spring and summer.
But prices have been dropping so fast that the overall year-over-year percentage drop value hasn't gotten smaller for even one month since 2007. It's gotten bigger each month, and lately by an accelerating amount I think, until this month.
According to CS, prices in Washington overall were never "up in the summer" last summer--they just fell more gently each month (barely fell at all) and the momentum is decidedly worse this year.
DC MRIS statsI sent my acquaintance this page that's linked from Harriet's front page. I knew I had seen DC's inventory somewhere. Wow, the market dynamics there look like impending doom. Check out the ramp up in month's of inventory. Or how much it's now overpriced relative to the whole area. Or the increasing days on market, or the dropping sales volume. Wow, they're like a year behind us or more in the progress of this crash.
I think my friend is now convinced to find a nice place to rent here first before leaping into buying here. Given his lack of familiarity with the area, I think this is wisest anyway, but given these increasingly dire market dynamics I'd say it's brilliant.
"Cara Said...
Or the increasing days on market, or the dropping sales volume. Wow, they're like a year behind us or more in the progress of this crash."
Cara - now you can see why ive been preaching to the (east of the potomac) crowd to wait for some time now. This worsening can be seen not only in DC but in most of MD. Ironically, DC is in the best shape of most of the areas east of the Potomac. Essentially - DC is their Arlington.
I will say, I am backing off the unabated doom I saw for them just a few months ago. Particularly, like NOVA they didnt have any "spring inventory bounce" this year. Surprising in that if they truly were a year behind, they shouldnt be seeing this the same time we are.
Bottom line, I still think this area is behind us in terms of working through its problem inventory - however they seem to be handlining it better than NOVA did. I still think its early to buy there, but I am kinda backing off my Fairfax/Loudoun sized price declines forecast. Unless things degrade significantly soon, Alexandria declines may be the order of the day - but I reserve the right to change my mind :)
"Wow, the DC market dynamics there look like impending doom. Check out the ramp up in month's of inventory. Or how much it's now overpriced relative to the whole area. Or the increasing days on market, or the dropping sales volume."
Yep.
As far as new construction, 34 units sold, 397 in inventory.
And you can't escape by turning your condos into rentals either--some new rental buildings are giving 2 and 3 months rent free.
When I sold in 2007, I was told of thousands of units getting ready to come online across the city.
Some HAVE turned into rentals--but, it sort of softens the "they aren't building more land" argument.
The new Butterfield house had enough trouble selling some of their units, so they decided to become landlords and rent the REMAINING ones.
The new Madrigal lofts lowered their prices 50-70K after keeping list prices flat for months.
Went in to one new downtown building just to say high and there was someone in there trying to get a meeting to talk about getting out of their contract. I wonder how prevalent that is for the new downtown buildings, where the people bought a while back and are now seeing prices crack before they even move in. (I know that's a big deal in other cities...)
The big gallery place building (Avalon? I think) sold out a couple of years back, but now units are coming back on the market--which is tough because some of them look out over one of the noisiest, light-flashiest intersections in the city--like times square.
There are other stories...things are changing downtown.
CRT, Scott,
It's funny, for some reason I felt really bad convincing people not to buy. These are people who have the downpayment and are only going to buy within their means, who am I to tell them to wait? (Someone who knows prices aren't going to go shooting up again in the next year and that their money may go alot further then). Too much ingrained realtor-speak in me still, I guess.
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