The Case-Shiller Index of home prices came out yesterday.  It is an interesting index because it concentrates of resales and looks at the new prices of properties that have previously sold.  In theory, it is tracking the same houses over time to see what values are doing.

In looking at the methodology, I think that there are some weaknesses in the way things are looked at, but the data is still  interesting and relevant.

For the Atlanta area, C/S saw a 9.5% decrease in values from Sept. 07 until Sept. 08. and a 1.3% decrease from August 08 to September 08… which followed a 0.3% decrease from July 08 to August 08.

Oddly, in the numbers I track for for Gwinnett County, average prices (not nearly as accurate… especially month to month) were down 8.4% year over year in October.  September to October saw a 4% increase… but I wouldn’t count on that number.

Case-Shiller also have an index which is useful for tracking long term appreciation and comparing markets.  Atlanta was at 122.72.  That in and of itself means nothing, but when comparing it to other areas it does have some use.

  • Despite a 31.3% year over year drop, Las Vegas still comes in at 146.58.
  • Los Angeles is at 184.54 with a 27.6% drop over the last year.
  • Cleveland, Dallas and Detroit are the cities that are lower than Atlanta.  Dallas is very close.  the other two cities are in a slump that pre-dates the current recessionary economy and in fact pre-dates the mortgage meltdown.
  • Basically, Atlanta is down to 2004 price levels.  Specifically, July/August 2004.

There are a couple of points to keep in mind with this data…

  • The overall market is not a single individual house.  There are homes right now on the market that are at great prices.  There are homes on the market that are so over-priced it isn’t even funny.
  • The big questions revolve around…
    • Where is the support level?  2004?  2001?  1998?  Nobody knows for sure…
    • How will any stimulus or rescue package affect values?
    • At what point will consumers feel confident again?

We obviously don’t know.  But I do see some investor activity because there are properties that are cash-flow capable at current prices.  I am also seeing properties that are attractive to people looking for a primary residence.  Finally, there are a LOT of properties that just aren’t realistically priced.

I am looking forward to seeing the new numbers from FMLS at the beginning of December.