Case and Shiller Come Through

Submitted by Rich Toscano on November 9, 2007 - 4:13pm

Well, that was a weird coincidence. Less than a week after I wrote about the idea of trying to track different market segments, S&P announced that they will now offer three Case-Shiller indexes for low-, medium-, and high-priced San Diego homes (in addition to the original aggregate index). This will be far better than whatever I would have done because Case and Shiller use same-home sales for their comparisons.

Watch this space for a possibly excessive collection of new charts.

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Thanks Rich - just looked at
Submitted by brian_in_la on November 10, 2007 - 2:38am.

Thanks Rich - just looked at the data for LA...striking increase in the low end of the market compared to high end...will be a great new metric to play with!

Keep those charts and
Submitted by pmretep on November 10, 2007 - 8:25am.

Keep those charts and letters comin' man.

Low end home values
Submitted by Asterix on November 10, 2007 - 11:28am.

Low end home values increased at a higher rate than high end home values. Note that the decrease in low end values is also greater than the decrease in high end values. This makes sense. The rate of decline in an asset can often be proportional to the rate that the asset increased.

Asterix

Compared with 2000, lower
Submitted by Eugene on November 10, 2007 - 9:57pm.

Compared with 2000, lower interest rates allowed to support 25-30% higher home values, and incomes grew around 30%.

For San Diego MSA:
Median income: $53.4k (1999) -> $69.1k (2006)
80th percentile income: $98k (1999) -> $127k (2006)

If 2000 home prices were fundamentally sound, you could argue that in 2006 high end houses were overpriced by ~30%, and low end houses were overpriced by 75%.

Since 2006, all houses corrected slightly, but high end houses took a hit from a jump in jumbo rates. Today San Diego is overpriced by ~50% across the board.