Tuesday, February 26, 2008

S&P/Case-Shiller: DC Worsens

The press release will come out tomorrow, but the latest data for the S&P/Case-Shiller Home Price Index show that the housing market in the DC metro area continues to deteriorate.
  • Month over month [December/November]: Down 2.54%.
  • YoY [December 2007 / December 2006]: Down 9.43%. The December 2007 index for DC is 217.78 vice 240.45 for December 2006.
Looking at month/month comparisons for 2007, the downward trend is accelerating alarmingly. For example, the month/month decline in February 2007 [February/January] was -0.36%. DC's December 2007 index value matches that of March 2005 [217.86]. 
As quoted in the NY Times:

U.S. home prices lost 8.9 percent in the final quarter of 2007, Standard & Poor's said Tuesday, marking a full year of declining values and the steepest drop in the 20-year history of its housing index.

''We reached a somber year-end for the housing market in 2007,'' said one of the index's creators Robert Shiller. ''Home prices across the nation and in most metro areas are significantly lower than where they were a year ago. Wherever you look things look bleak."

The S&P/Case-Shiller home price indices, which include a quarterly index, a 20-city index and a 10-city index, reflect year-over-year declines in 17 metropolitan areas with double-digit declines in eight of them.

Will DC hit double-digits in next month's report?


Anonymous said...

Case Shiller is a good measure for what is happening in the Washington Metro Area, but it doesnt have a toehold in reality for the picture of what is happening "in DC".

The washington MSA contains not only the bubbilicious beltway counties, but goes as far out as Jefferson WV where things are cratering! Also, CS wont measure condo sales which make up nearly 1/2 of DC inventory (out there, condos are only a small fraction of inventory).

So, CS takes the 150-300 monthly sales of SFH & TH in DC, and lumps them in with the THOUSANDS of SFH & TH in the surrounding counties where things really suck and then claims "prices are down XYZ amount in DC". The problem is, the flat or slightly down prices "in DC" are washed away by the heavy weighting towards the suburbs.

Dont get me wrong, CS is excellent for telling me what is happening in the MSA, but when it comes to DC itself, CS is worthless!

Keith said...

I agree. Condos are omitted and it measures the DC MSA, not DC alone.

It is what it is.