Widespread Declines According to S&P/Case-Shiller? Home Price Indices

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<pre><tt><tt>Widespread Declines According to S&P/Case-Shiller® Home Price Indices

LA area down 13.7% YOY with declines seeming to accelerate...Oct/Nov down 3.6% and Nov/Dec down 3.1%.

<a target="_blank" href="http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_022603.pdf">http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_022603.pdf</a></tt></tt></pre>
 
<strong>S&P/Case-Shiller National 1987-2007</strong>





<img src="http://www.irvinehousingblog.com/wp-content/uploads/2008/03/case-shiller-index-national-1987-2007.jpg" alt="" />
 
<strong>S&P/Case-Shiller Los Angeles 1987-2007





<img src="http://www.irvinehousingblog.com/wp-content/uploads/2008/03/case-shiller-index-los-angeles1987-2007.jpg" alt="" /></strong>
 
No, those are raw index numbers.





You can read about the methodology <a href="http://www.macromarkets.com/csi_housing/sp_caseshiller.asp">here</a>.
 
<p>"IR, are those inflation adjusted?"</p>

<p>This one is, if I did it right:</p>

<p><img alt="" src="http://www.ipoplaya.com/casecpi.jpg" /></p>
 
It will be interesting to see inflation adjusted declines in a few years when we are closer to the bottom. I suspect we will see 70% to 80% declines on an inflation adjusted basis.
 
<p>You'll get a kick out of this IR - maybe...</p>

<p>I took 10 recent sales in Irvine and applied the Case-Shiller valuation methodology, at least what I think it is, and came up with an average value of 210.585. That is almost 10% below the December number! Wowzer. </p>

<p>Tell me if this is right if you will:</p>

<p>I took the CS index value of the month the home previously sold in, calculated the multiple/ratio of the recent selling price vs. the previous sales price, and then applied that multiple to the index value at the time of previous sale to derive the current index value:</p>

<p>



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Previous Sale Date

Previous Sale Price

Current Sale Price

Previous Sale CS

Current Sale CS





ravendale

2-May-02

$544,500.00

$920,000.00

128.73

217.51





galena

2-May-02

$556,500.00

$936,000.00

128.73

216.52





teardrop

1-Jan-06

$968,500.00

$859,000.00

265.92

235.85





emerald

1-Sep-04

$1,200,000.00

$1,212,000.00

215.08

217.23





atlanta

18-Dec-01

$385,000.00

$640,000.00

120.65

200.56





kernville

4-Dec-02

$740,000.00

$1,159,000.00

143.26

224.38





hawkcreek

1-Sep-05

$730,000.00

$615,000.00

255.85

215.54





mineral

1-Sep-00

$360,000.00

$645,000.00

108.94

195.18





rhode

23-Jun-98

$385,500.00

$920,000.00

86.97

207.55





parma

1-Jun-01

$570,000.00

$859,000.00

116.47

175.52













Average

210.59







</p>
 
Your calculation looks correct to me. The Case-Shiller methodology does have a few tweaks to round outliers, and of course, they are looking at a broader area, but I suspect your number will be close to theirs when it is published.
 
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