Tuesday, November 27, 2007

September Case-Shiller

The September S&P/Case-Shiller data were released today. Los Angeles (includes Orange County) is now down 7.0% from its peak in September 2006 - another 1.2% from August. The national index is down 6.0% from its peak in June 2006 - another .7% from August.

Don't forget, these sales, closed in September, entered escrow July-August, largely before the August credit crunch. That impact will unfold ahead.

There's more. Earlier this month S&P/Case-Shiller filled in data from 1980-86, and added separate Low, Middle, and High price tiers to the earlier Aggregate index. Above are these four indices for Los Angeles.

Significant is that the Low price tier rose more than the High price tier in Los Angeles, and the Low tier has fallen while the High tier has mostly plateaued so far. Like Santa Monica? Yes and no.

Above I fitted the Aggregate and High indices to low-end north-of-Montana sales, scaled the same as I posted last month. See the new problem?

The High index doesn't rise enough to fit recent Santa Monica data, yet is too high to fit the mid-1980s data. It appears Santa Monica prices have risen more than the overall Los Angeles High tier.

Which could correspond to a rise in position of Santa Monica among higher-priced communities. But it doesn't change my expectation of prices falling ahead, as they did 25% 1990-95.


Kate said...

Thanks for running these numbers. Fascinating!

Do you know why the CS Index is at 100.00 across the board in January 2000?

Anonymous said...

You are 100% correct thanks

But how do you explain the house that just sold for $7 mil north or montana?