Tuesday, June 24, 2008

S&P/Case-Shiller: April 2008 report is out

The April 2008 S&P/Case-Shiller report was released today.

Data through April 2008, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show annual declines in the prices of existing single family homes across the United States continued to worsen in April 2008, with all 20 MSAs now posting annual declines, 13 of which are posting record low annual declines, and 10 of which are in double-digits.

For the Washington, DC area, the market's not getting better [see the chart I created using their data below].

The data for the Washington, DC MSA show:

  • For March 2008 to April 2008, a 1.05% decline.
  • For April 2007 to April 2008, the market's declined 14.8%.
  • From its peak in May 2006, the DC area has fallen 19.86%

I'm well aware the S&P/Case-Shiller report for DC covers a very broad area and excludes condos, which are a significant part of the District's market. However, it is an important data point when considering the health of the housing market in the District.

6 comments:

Anonymous said...

The data also shows a flattening effect. Places that had steep declines for the better part of the year (including DC) are now showing more modest declines. Places that were showing only modest declines to begin with are now showing slight upturns in prices.

One month does not make a trend, but if it did, it would suggest the worst of the steep declines is over for the DC area. I guess we will just have to wait and see!

Anonymous said...

All other things being equal, prices will fall if interest rates rise. All other things being equal, recession-like conditions leads to a poor housing market. All other things being equal, higher costs of other needs, such as fuel and food, means less for housing.

We are not at bottom yet. There is a lag in layoffs, and many of the ARM resets have just occurred so the consequences may be 6 months away, or right after the holiday season.

Ceteris paribus.

Keith said...

OK folks, a new rule: he who useth Latin in a comment must offereth a translation.

Ceteris paribus

Anonymous said...

According to Radarlogic.com, a real estate data group, as of March 2008, the Washington area has the highest annualized growth of any metro area over the past five years:

1. Washington, DC
2. Miami
3. Seattle
4. Los Angeles
5. Phoenix

That is not a good spot to be in this market. In 2005, Washington ranked among the top 5 in the 5-year condo appreciation rate. The fall of the leaders has it out front now. If that doesn't indicate a probable fall, I don't know what does. Yes the fall stated later here than in other places, but the question is what were the underlying fundamentals to drive the increase.

In condos, DC was among the top 4 markets (#2) with percent per square foot increases, all of which were marked, just like DC, by a lot of speculative activity: Miami, Washington DC, Las Vegas, Phoenix.

Next year will be a good time to buy!!!

City Vista, Dumont, Citta 50, 22 West, Metropole, Jenkins Row, Logan Park, Logan Station, Logan Row, Capitol Hill, Yale Steam, Floridian, Sonata, Solea, Kenyon Square and so many more.

I don't understand why many of the units in newly condos are not listed even though they are not sold. Interestingly Manhattan condo prices were recently $500 psf. It makes no sense that DC's could approach that level. Manhattan's have gone above $1000 psf but were driven by megabonuses. With Wall Streets problems, look for those uberprices to fall hard.

Jamie said...

New home sales companies (when they are smart) don't list every unit in a building in MRIS. This would be a pain in the ass and would give away valuable information to their competitors as to where they are exactly priced. Competing projects could then adjust their price or offer an incentive to specifically combat them. Instead they typically will list a sampling of units (two or three) that have price points that get the publics attention (low) and then withdraw the listing when it sells or the days on market starts to get too high and replace with another. They will list select sold/settled units in MRIS for appraisers to help justify their the sales prices of unsettled units.

Anonymous said...

Jamie, that is what the companies do. It provides false data to the market, at least at the retail level.

The building owners know what is happening in the market and what is sold or unsold from market research firms and other available public data that would consume too much time for an individual to get efficiently. So the seller must rely on realtors who are incented to get the highest price to make the biggest commission.