Case-Shiller from 3 months into the future

Saturday, August 1, 2009

July '09

City average: 39.1% off the peak, 57.9% above Dec 1999
Top tier: 20.1% off the peak, 80.1% above Dec 1999
Middle tier: 39.9% off the peak, 55.3% above Dec 1999
Bottom tier: 50.9% off the peak, 42.5% above Dec 1999

The market is really heating up. The overall city index is up 5% in one month, which is the highest rate of change in the recent history, even exceeding records set during the spring of 2004.

There's one caveat, though - this exponential-looking growth is partly caused by a change in sales structure: the ratio of top tier sales to middle tier sales seems to be up about 20% compared with the previous month. Middle tier by itself is up "only" 3%. It may be an artifact in my data, since some sales may not yet be reported yet, maybe top tier sales are reported faster. I'll update charts and numbers when late-reporters become available.

Also, it's already August and the frenzy may subside in a month or two.

Here's my forecast of the official Case-Shiller index for the next three months:

I've rescaled the "SDHPI" curve to match up exactly with last month's official reading.

Final point is less certain since I need August sales to calculate it precisely - but it should be roughly in that area.


quixote said...

What do you anticipate will be the effect of the lifting of the moratorium on foreclosures on Sept 15 2009? Is it time to buy yet in 92103 or 92037? Or hold off a while longer? Thx for your opinion!

SD Scientist said...

I don't think that either 92103 or 92037 (SFR) have deflated enough to make this a good time to buy. There's too much inventory in both, and prices are too high by historical standards. I may be wrong.

My general impression with regard to 92037 is that low-end condos (esp. in UTC area) are more fairly priced than high-end condos and SFRs. My plots only track SFRs.

If I were looking in those areas, I'd be looking for a place below 150% of early-2000 price.