Tuesday, August 04, 2009

DC area tiered house price indexes

From Calculated Risk:

Posted by at 7:16 AM
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15 comments:

  1. AnonymousAugust 04, 2009 10:13 AM

    Notice how VERY flat prices were pre-bubble. That's what you'd expect in a market dominated by stable government employment.
    --Jim A

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  2. AnonymousAugust 04, 2009 1:09 PM

    More information is needed to make this graph useful. At what point where the prices in the ranges? I.e. a $200k house in 2000 was almost up to $600k in 2006. It is now $300+k. Which line would that house be on?

    Thanks, Brad S.

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  3. JamesAugust 04, 2009 4:05 PM

    Brad S.,

    I wondered the same thing. Here's what S&P says:

    "Standard & Poor's publishes supplemental tiered price data for 17 of the metro areas it covers. Tier breakpoints – price levels that divide recent sale prices in each market into thirds – are calculated for the period covered by the latest, updated index points."

    So, it would be on the line that reflects its current value, I think.

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  4. AnonymousAugust 04, 2009 5:15 PM

    Curious..how is this graph normalized?

    Housing has gone up about 1-3% per year over the last 100 years of so...that's not including ownership costs either.

    What are they using to level the graph?

    Regardless....any crackpot who looks at this graph and says this is normal or state that this is the end is a complete moron.....do I have your attention Partisan/ANON? I hope so.

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  5. PartisanAugust 04, 2009 6:29 PM

    Sure do. I love watching as this thing goes flat far far above your stated point of maximum decline:

    "What we will see, in my opinion, are prices that will revert back to 2000-2001 levels. This will be an overshoot. On the way back up, we may again have another overshoot....because the system is reacting like a suspension system that is pushed down and released. Any damping may occur due to things like stimulus packages that are designed to reduce rates of change, not prevent them. If these actually stopped change altogether, it would make matters much much worse."

    Posted by: NOZ January 27, 2009 6:25 PM

    http://bubblemeter.blogspot.com/2009/01/decline-in-existing-home-prices.html

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  6. AnonymousAugust 04, 2009 10:33 PM

    I like that little uptick right after Jan 07. Its larger than the current uptick! Cant wait to see the big fall right after this uptick, just like the one in 07.

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  7. AnonymousAugust 05, 2009 2:21 AM

    PARTISAN:

    It's quite obvious you can't read a graph if your life depended on it.

    The slope on that graph is going to make you look really really stupid...not that you don't come across that way already. We're already down to 03....two more years to go and no end in site.

    Good luck...you should go buy a house right NOW. I want you to put your money where your mouth is...otherwise shut it.

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  8. AnonymousAugust 05, 2009 8:45 AM

    Well I'll pile on Partisan too...
    To assume that the little bump in the last couple of months represents the RE market bottoming out, would be making the same mistake as those who looked at the little bump that the market took at the beginning of 2007 and assumed that appreciation was about to come roaring back. -Jim A.

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  9. AnonymousAugust 05, 2009 9:22 AM

    Im amazed at the level of denial here on this board. Yes, the upturn looks alot like it did from 05-06 kinda like you see at the beginning and end of a severe downturn.

    There is however, one major difference between 2006 and now. In 2006 it was obvious this was not the end because of the massive inventory spike. Now, with inventory under 2005 levels and falling, its not so clear:

    http://www.recharts.com/nova/nova.html

    4 years ago, our host David was able to outflank the venerable Calculated Risk by pointing out quite simply ITS THE INVENTORY STUPID!!!

    http://bubblemeter.blogspot.com/2005/11/its-inventory-stupid.html

    I think it would be wise if we once again, heeded his advice.

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  10. AnonymousAugust 05, 2009 9:38 AM

    "Now, with inventory under 2005 levels and falling, its not so clear:"

    who cares about arlington? I live in Bethesda, and if I bought a house I would buy around here. I dont care about the inventory of a single town in VA. You guys really live in a small world, the DC area itself is tanking...take solace that your particular street has low inventory and shut the hell up about arlington ONLY already.

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  11. AnonymousAugust 05, 2009 9:48 AM

    Thats not arlington, its all of nova - 2 million people last time I checked.

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  12. nonpartisanAugust 05, 2009 2:37 PM

    I agree inventory is very important - and the invemtory of homes for sale is coming down. However, what about the shadow inventory? A 6-8 year old neighborhood of about 60 homes that I have been targeting has two homes that have never been occupied, and two now vacant - and word it that owners plan to hold until they at least "regain their losses". No sale signs in the entire neighborhood during the summer!, unlike the last three selling seasons when there were at least three(overpriced)for sale at any one time. Just one example, of which I believe there are thousands

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  13. AnonymousAugust 05, 2009 3:02 PM

    "No sale signs in the entire neighborhood during the summer!, unlike the last three selling seasons when there were at least three(overpriced)for sale at any one time. Just one example, of which I believe there are thousands"

    Very true, but part of the normal correction process. As in every downturn, people hold out, refuse to list, wait for things to get better...In the current downturn, this phenomenon started in earnest in 2006. In 2007 everyone assumed it was "holding out" inventory would return. It didnt in 2007 or 2008 or 2009.

    The same thing was true in the 1990 downturn. By 1991 inventory peaked and started going down. Bears at the time likely assumed it was "temporary", they assumed holdouts would return in large numbers - driving prices back down.

    They didnt return in 1992, or 1993, or 1994 or 1995 or 1996. They did return in 1997, but only after a full blown recovery was well underway.

    Thats the takeaway from this, and one of the reasons prices stay flat for a long time (like they did 1992-1996), people simply dont return.

    I agree that home prices are way overvalued. However, with lack of inventory, home prices can now tread water for an indefinite period of time, waiting for inflation to catch up - just as it did in the period of 1992-1996.

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  14. AnonymousAugust 05, 2009 8:03 PM

    "Thats not arlington, its all of nova - 2 million people last time I checked."

    Thats funny cause I see about 1 million foreclosures in reston, herndon, centreville etc.

    Anyway Im interested in MD, so arlington doesnt matter to me anyway

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  15. AnonymousAugust 05, 2009 8:09 PM

    "The same thing was true in the 1990 downturn"

    Its amazing people can even bring up 1990 and 2006 in the same sentence. One was price dropping from a norm, the other is prices dropping from a 600% increase due to liar loans.

    Its like comparing a used tissue in the garbage bin to a massive land fill in NJ.

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