Real Estate Market

It's been rumored for weeks, but Microsoft made it official today, cutting 5000 jobs. Microsoft.

You're watching the last leg of the stool being kicked out. The tech industry held out longer than most this time around. In the first half of 2008 many of the highly compensated and generally well-financed people in the tech industry were keeping prices steady in the most desirable neighborhoods of the Bay Area and Seattle (notably waterfront properties). Then as the stock markets declined in the second half of the year, we lost a lot of down-payment money. Finally this crew is now worried about basic monthly income.

Here's how the housing market has been buffeted by the financial storm in Seattle.

I mentioned this to Aubrey Cohen at the Seattle PI in an interview last September as the job situation was starting to look bleak. "Seattle's drivers seem to be intact until the economy hits Microsoft and Amazon," I said at the time.

Well. Here we are.

We released our monthly national real estate report earlier this week. You can download the PDF here. Prices continued to fall in most markets. The Altos National 10-city Composite price fell 0.8% from October through November. Inventories are declining a little as would be expected in the fall.

Report: National Real Estate Prices Decline 0.8% in November 2008

The Altos Research National Real Estate Report measures current real estate data in major markets around the country. November data shows Las Vegas continuing to lead the country in home price declines. Inventory levels declined in most markets into the winter slow sales months.

MOUNTAIN VIEW, CA December 9, 2008 - The Altos 10-City Composite Price Index showed a decline in asking prices of 0.8% in November and 2.4% for the past three months. Prices of properties listed for-sale fell in 20 of 26 major markets according to the Real-Time Housing Market Report, published by Altos Research, the premier source for real-time real estate data, and market analysis consultancy Real IQ.

Asking prices fell at the fastest rate in Las Vegas - down 3.3% during November - and 6.9% over the most recent three-month period. This marks the eighth consecutive month that Las Vegas has posted the fastest rate of declining prices among major markets. Listing prices rose at the fastest rate in Houston - up 2.4% in November. Denver, Dallas and Houston are now the only markets showing three months of sequential price increases.

"Tight credit, job losses and plunging consumer confidence continued to pressure listing prices in most major markets during November," said Michael Simonsen, CEO and co-founder of Altos Research. "Recent government actions to reduce mortgage rates and slow the pace of foreclosures could finally start to stem the decline but we don't expect to see major changes until at least mid-2009."

Inventory levels declined in 24 of 26 major markets with only Phoenix and Las Vegas registering small increases. Across the 10-City Composite Index markets, inventory declined by 5.1% in November and 7.5% over the past three months. Inventory fell by the largest amounts in Boston, San Francisco and Seattle. "Inventory levels have continued to decline for many months and November was no exception," said Stephen Bedikian, partner and research director for Real IQ. "The real estate industry continues to work through the large inventory overhang but only very slowly."

Twenty-four of 26 markets had an average days-on-market of 100 or more. The average days-on-market rose in all but one market, Las Vegas, where it was effectively flat during November. By far, the market with the slowest rate of inventory turnover was Miami at an average of 179 days-on-market. Miami has experienced the slowest market turnover in every month since September 2007. San Francisco enjoyed the fastest rate of turnover with an average days-on-market of 92.

The report examines housing pricing, inventory levels and market conditions in 26 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The Real-Time Real Estate Report is released every month.

Some nice press coverage in BusinessWeek this week. We compile unique luxury real estate data for our friends at the Institute for Luxury Home Marketing. If you stopped by the ILHM booth at NAR last week, you'd have seen the great report that their members have access to. The Institute launched the reports at the show.

Coincidentally, BusinessWeek called looking for insights on how the real estate market is performing at the very high-end. The short answer is that, while the luxury market held out longer than the low end, everyone is feeling the pain now.

"The entry level of the upper tier--the $500,000 price point and up--has been softening for a while," said Laurie Moore-Moore, founder and CEO of the Institute for Luxury Home Marketing, a Dallas-based group that trains high-end agents. "What we've also seen in the last month is huge uncertainty at the very top of the market. People want to know where are we headed, how serious [the downturn] is going to be, and what is the duration. There are enough questions that at even at the top of the market people are waiting and watching."

Here's how our Luxury Real Estate Market data works: We take the 10 highest-priced zip codes in 31 metro markets around the county (as long as their median price is over $500,000). We composite those zip codes together into a metro regional view (for example of the luxury real estate market in Los Angeles). Then we roll all the metros into a nation-wide view, which we call the ILHM National Composite.

The data and report are available only through ILHM and ILHM members. If you're interested in seeing all the detailed statistics at the national level, you can download the weekly National Luxury Market Report from ILHM. Institute members have access to the detailed luxury data in their local markets as well, which is cool.

Here are the Case Shiller Index numbers released today for July. No big surprise. Down of course. One percent more this month. Down 17% from July 2007. As I've been saying in the press lately, we've seen no signs of a bottom. Even before the crisis of the last couple weeks, pricing through September continues to be down sequentially.

As we've already measured, the next three months of the Case Shiller numbers continue their fall at the same pace. Price decreases through September have not accelerated. There are no signs of market inflection points yet either. Days on Market is climbing and Inventories are flat at best. Contact us if you want specifics on the CSI for a given future date or a given MSA market.

MSA	CSI July 2008	Change from June 2008	Year over year change
Boston	162.58	0.17%	-5.35%
Chicago	149.6	-0.35%	-9.95%
Denver	132.67	0.77%	-4.71%
Las Vegas	154.15	-2.75%	-29.90%
Los Angeles	192.55	-1.63%	-26.18%
Miami	186.84	-1.60%	-28.25%
New York	192.92	-0.76%	-7.41%
San Diego	172.2	-1.81%	-25.02%
San Francisco	156.88	-1.85%	-24.81%
Washington DC	195.49	-1.07%	-15.80%
10-City Composite	178.46	-1.09%	-17.49%

Our National Report for September data comes out later this week with the current view on the market rather than the backward looking stuff released today. Stay tuned for details

Our latest National Housing Market Report is out. This one examines data through end of July 2008. You can download the PDF here.

Here's the press release:

Real Estate Report: National Housing Prices Down by 0.8% in July

Report measures current real estate data in major markets around the country. Data shows Las Vegas continuing to lead as the weakest US housing market with real estate prices down another 4% in July. Current real estate data shows some summertime price stability in Midwestern markets Detroit, Cleveland, Indianapolis, and Minneapolis

MOUNTAIN VIEW, CA August 5, 2008 - The Altos 10-City Composite Price Index showed a decline in asking prices of 0.8% in July and 1.3% for the past three months. Prices of properties listed for sale fell in 13 of 26 major markets according to the Real-Time Real Estate Report, published by Altos Research, the premier source for real-time real estate data, and market analysis consultancy Real IQ.

Asking prices fell at the fastest rate in Las Vegas - down 4.0% during July - and 7.5% over the most recent three-month period for an annualized rate of 30%. Listing prices rose at the fastest rate in Detroit - up 4.8% in July - followed by Cleveland where prices were up 2.7%. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis.

"While prices continue to fall in coastal and Western markets, prices appear to have stabilized in Midwestern markets that were previously declining," said Michael Simonsen, CEO and co-founder of Altos Research. "The real test will come in the fall when markets typically experience a seasonal slowdown which will be exacerbated by high job losses and foreclosures."

Asking prices fell at the fastest rate in Las Vegas - down 4.0% during July - and 7.5% over the most recent three-month period for an annualized rate of 30%. Listing prices rose at the fastest rate in Detroit - up 4.8% in July - followed by Cleveland where prices were up 2.7%. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis.

Listed property inventories declined with the 10-City Composite markets showing a decrease of 2.0% in July. Inventory rose in just 6 of 26 markets with the biggest decreases occurring in Detroit and Cleveland.

"Broadly declining inventory is a positive sign in the near-term, particularly for the Midwestern markets which all showed inventory declines," said Stephen Bedikian, partner and research director for Real IQ.

For the Altos 10-City Composite, the average days on market was 111, a slight increase from 109 in June. Thirteen of 26 markets had an average days-on-market of 100 or more. By far, the market with the slowest rate of inventory turnover was Miami at an average of 156 days-on-market, nearly a full month more than the next slowest market - Tampa. Austin led all markets with the fastest rate of inventory turnover at an average of 78 days-on-market.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for sale in 31 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The Real-Time Real Estate Report is released every month.

We released our National Real Estate Report today. Here's the press release.

Real Estate Report: Housing Prices Down By 0.5% in June

Report measures current real estate data in major markets around the country. Data shows Las Vegas the weakest US housing market with real estate prices down 3.6% in June. Current real estate data shows Denver the strongest US housing market in June with prices up fractionally over May 2008.
MOUNTAIN VIEW, CA July 8, 2008 - he Altos 10-City Composite Price Index showed a decline in asking prices of 0.5% in June and 0.8% for the past three months. Prices of properties listed for-sale increased in 15 of 26 major markets according to the Real-Time Real Estate Report, published by Altos Research, the premier source for real-time real estate data, and market analysis consultancy Real IQ.

Asking prices fell at the fastest rate in Las Vegas - down 3.6% during June - and 7.2% over the most recent three-month period. This is the third consecutive month that Las Vegas has held that dubious honor. Listing prices rose at the fastest rate in Denver - up 2.6% in June and 6.4% over the most recent three-month period.

"While the Composite Index continues to show price declines, the rate of decline has slowed recently and more than half of the markets we track are showing sequential asking price increases over the past three months," said Stephen Bedikian, partner and research director for Real IQ. "Housing markets are local, and this downturn remains largely confined to specific geographic areas of the country with four states in particularly bad shape: California, Florida, Nevada and Arizona."

Listed property inventories increased substantially with the 10-City Composite markets showing an increase of 5.7% during the past three months and 1.9% in June. Inventory rose in 17 of 26 markets with the largest jumps in Los Angeles and San Diego, up 8.7% and 6.1% respectively in June.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for-sale in 26 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

For the Altos 10-City Composite, the average days-on-market was 109, a slight increase from 106 in May. Eleven of 26 markets had an average days-on-market of over 100. By far, the market with the slowest rate of inventory was Miami at an average of 154 days-on-market. Austin led all markets with the fastest rate of inventory turnover at an average of 72 days-on-market.

"Inventory continues to increase which is typical during the seasonally strong spring and summer seasons," said Michael Simonsen, CEO and co-founder of Altos Research. "The true test will come in the fall when the market experiences seasonal weakness. If inventory, especially foreclosure listings, piles up too quickly, prices may start declining broadly again."

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and is released every month. Report downloads are available at: www.altosresearch.com.

We released the latest National Real Estate Report today. You can download it here [PDF].

The data inspects 26 metro markets around the country and tracks home prices, inventory and days on market. We also track the Altos 10-City Composite for a National perspective on the trends.

Here's the press release:

HOUSING PRICES DOWN BY 0.3% IN MAY

Listing Prices Fell in Only 11 of 26 markets

MOUNTAIN VIEW, CA � June 10, 2008 � The Altos 10-City Composite Price Index showed a decline in asking prices of just 0.3% in May. Prices of properties listed for-sale increased in 15 of 26 major markets according to the Real-Time Real Estate Report, jointly published by Altos Research, the premier source for real-time real estate research, and market analysis consultancy Real IQ�.

Asking prices fell at the fastest rate in Las Vegas - down 3.7% during May and 6.5% over the most recent three-month period. Listing prices rose at the fastest rate in Denver up 3.7% and Dallas up 2.2% during May. Prices increased by more than one percent for the month in 11 of 26 markets.

"The weakest markets continue to be concentrated in Florida, California, Arizona and Nevada which all experienced the fastest price increases during the boom times," said Michael Simonsen, CEO and co-founder of Altos Research. "Now these same markets are outpacing others on the downside as foreclosures and price declines continue relentlessly. We�re seeing some stability in many markets outside of these hard-hit states."

Listed property inventories increased substantially with the 10-City Composite markets showing an increase of 7.9% during the first quarter and 3.7% in May. Inventory rose in 25 of 26 markets with the Miami market being the only exception. Inventory actually declined 1.3% in Miami during May and 2.4% during the past three months.

Data in the Real-Time Housing Market Report is based on analysis of over one million properties currently listed for-sale in 26 metropolitan markets across the country. The report is the most timely source of housing market data on current market activity.

For the Altos 10-City Composite, the average days-on-market was 106 � an improvement from 111 in April and 113 in March. Miami experienced the longest time-on-market span with an average days-on-market of 152. San Francisco led all markets with the fastest rate of inventory turnover at an average of 73 days-on-market.

"Continued growth in inventory across virtually all markets will restrain near-term price increases," said Stephen Bedikian, partner and research director for Real IQ. "Markets like Denver and Dallas are showing strength because they did not experience high price inflation during the boom and are showing only limited inventory growth now. Affordability and limited inventory are the keys to a healthy market."

The report examines housing pricing, inventory levels and market conditions in 31 major U.S. metropolitan statistical areas (MSAs): Atlanta, Austin, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, Salt Lake City, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and is released every month. Report downloads are available at: www.altosresearch.com.

A couple of charts to chew on this morning.

How's the condo market in San Francisco? Are all those new developments flooding the market yet? Let's look at pricing and value trends for Condos in the city.

Looks like pricing trends are holding nicely in the past year. Why is that? A quick hypothesis is that despite the fact that there are tons of new developments coming on line, the existing inventory of condos is actually very low relative to the population and immigration in San Francisco.

SocketSite shows some year over year inventory charts for real estate in San Francisco today. Here's how the inventory breaks out between single family and condominiums.

Altos links: San Francisco real estate reports

Today's look inspired by conversations with a subscriber in Charlotte North Carolina. (In case you haven't noticed, we've started publishing the Charlotte Real Estate Reports now.)

Given the sorry state of the national housing market, how is Charlotte faring?

Let's look at some of the towns around Lake Norman: Huntersville, Cornelius, and Davidson.

At around $300,000, Huntersville and Cornelius are nice upscale markets in a pleasant part of the world. Davidson is a little higher-end and is showing some signs of weakening prices off about 5% from last autumn. Davidson also has the highest days-on-market measure for all three towns. At 140 days, these properties are definitely not flying off the shelves.

But as you can see from the price chart, home prices in this part of the country seem to be holding up. Why is that?

We see two common themes of housing markets avoiding the big crush this winter:

1. They're markets that didn't climb spectacularly high during the boom.
2. They're steady growth economies.

What's a steadily growing economy mean? Well for one thing, it means people are moving in to the area. Check this population chart from Ersys.

So the Charlotte area has those two things in it's favor. What's next? Where does the market go from here?

Like most of the country, home buyers are in no hurry in Charlotte. We measure relative demand levels with our Market Action Index. When this index drops below 30, we call it (ever optimistic) a "Buyer's Market". The lower this index goes, the lower the current levels of demand and the more likely you are to see home prices decline in the near future. I'm afraid on this point, our Charlotte area towns aren't faring any better than most of the country.

As we mentioned with Austin, Texas the other day, some markets haven't yet been hit by the big hammer. If we escape a painful recession, maybe home values in these markets don't collapse. Unfortunately there's nothing in the early numbers that indicate home prices will climb significantly from here in the near term.

The New York Times last week carried a story on the tale of two housing markets.

AUSTIN, Tex. — The real estate market these days is a tale of two Americas, and one of them is not doing too badly.

In the America of big-city housing markets, especially on the coasts and in the struggling industrial Midwest, the huge run-up in values in recent years has given way to big drops in prices and sales volume. Millions of people owe more than their houses are worth.

But in the other America, specifically in cities like Austin; Grand Forks, N.D.; Yakima, Wash.; and Salem, Ore., the available evidence suggests the real estate market is holding up. Prices there never boomed as crazily as they did in the big cities, and now, even though volume is down almost everywhere, prices in many of these towns are firm or rising.

We'll leave aside the fact falling prices in the struggling industrial towns and the falling prices on the coast are barely related to each other and focus instead on the last statement.

Are home prices in Austin, Texas indeed holding up? Let's look:

From our perspective, Austin is indeed holding up better than some of the most bubbly markets, like Phoenix and San Diego.

Keep in mind though that in every market, the answer is: it depends. It depends on your price point, it depends on your neighborhood. In fact if we dive into Austin a little deeper, we find where that even though the prices haven't adjusted deeply, we can see where market demand is indeed cooling.

Days on market is climbing steadily across all price points. Despite a seasonal improvement in market time, The high end of Austin is on the market for a pretty long time right now. Buyers are in no hurry.

Furthermore, in Austin, when you look at the price quartiles, you can see the top of the market is squeezing but the bottom remains reasonably solid. This often implies, as the Times suggests, that the underlying economy is strong, immigration is positive, and people aren't so worried about their jobs. Here's the chart of home prices in Austin, by quartile. Note the slight squeeze at the top end of the market.

So I'll conclude with a cautious agreement with the Times. Yes indeed there are markets so far escaping major carnage. Many of these markets didn't have the incredible upside in the past few years, so that stands to reason. Finally though, nearly all markets are showing signs of weakness. The key worry for all these markets is that they're following the economy, not leading it. If a recession evolves into full bloom, I don't see how anyone is spared.

Links:

Austin Real Estate Report

San Diego Real Estate Report

Phoenix Real Estate Report

In the Dallas real estate market? D Magazine's Dallas Dirt blog is a great read. Among the insidery local rumors and excellent house porn, Candy Evans has been tapping our AltosCharts lately for some insightful interpretation of the housing market trends at the local level for all y'all Texans.

[aside: as a snobby Californian, this is what I instinctively think of when I think Dallas homes. But this makes me want to move there.]

Link: Our free Dallas Real Estate Research

Last week we published the February editition of our National Housing Market report [PDF download]. I was traveling and forgot to add it to the blog, so here it is. We've expanded the coverage this month and added a few more cities ebyond the initial 20 covered by the Case Shiller Index. We'll add a few more important cities in the upcoming versions of the reports too.

Here are the highlights from this month's report.

• Listing prices declined in 19 of 22 markets during January. Prices only increased in the New York metro area during January and were flat in Dallas and Phoenix.

• The largest monthly decline of 3.6% occurred in San Francisco. Over the three month period, listing prices in San Francisco have fallen by 6.1% from $708,551 to $665,100. The other California markets of Los Angeles and San Diego logged declines of more than 2% for the month of January.

• Property inventories declined in most markets except in the Northwestern markets of Seattle and Portland. Inventories tightened sharply in the Midwestern markets of Cleveland and Detroit with decreases of 10.4% and 5.4% respectively during January. Seasonal declines in listing inventories are typical during the winter months.

• Markets with the longest time-on-market are Miami and Minneapolis at an average of 144 days-on-market. Miami’s days-on-market only increased slightly from the previous month’s 143 days while Minneapolis jumped over 5% from 136 to 144 days. Sixteen of 22 markets had an average days-on-market of over 100.

• Denver led all markets with the fastest rate of inventory turnover at 61 days, followed closely by Dallas and San Diego at 80 days. The sharp decrease in Denver’s days-on-market indicator – almost 39% during the past three months – coupled with an inventory reduction of over 11% during the same period, should be a positive for listing prices in the coming spring selling season.

Jonathan Miller published the November Radar Logic RPX housing market report over the weekend. It's easy to spot that Sacramento is leading the nation down.

[aside: Radar Logic is cool. They measure Price Per Square Foot and try to do it across all properties, condos and single family homes, new and existing construction. No small task. The price per square foot approach is intended to measure value of the property regardless of the size of the property itself. In the real estate derivatives trading business, Radar is getting all the mindshare. Case Shiller is falling behind. more here.]

In the report just published for November, Sacramento saw a price-per-square-foot decline of 18%. Zowie. For those of you unfamiliar with California's central valley, this is an area dominated by lots of new construction, in huge projects, partly as Bay Area super-exurb. So the underlying economy in the Central Valley isn't nearly as dynamic as San Francisco, San Jose, or Los Angeles. Also much less dominated by the high-end, Sacramento is feeling the subprime fallout harder than most.

So Radar Logic is publishing for November. What are the real-time stats saying? Sacramento is not seeing any relief yet. Here's our price per square foot for Sacramento through February 1 2008.

Sacramento Housing Market Data Links:

Our free Sacramento Real Estate Research page

Here's a solid Sacramento Area Blog for more local flavor.

Last month we started publishing the Real-Time National Housing Market Report with Steve at Real IQ. The January 2008 edition was published yesterday. You can download the full report here.

The report was picked up today morning by the Dallas Morning News. Dallas is notable because we've watched demand stay at less-bad-than-most.

Here's the press release that accompanied this months report.

HOUSING PRICES CONTINUED TO DECLINE IN DECEMBER

Time-on-Market Increased as Housing Market Demand Falls Faster than Supply

MOUNTAIN VIEW, CA – January 9, 2008 – Prices of properties listed for-sale fell in 16 of 20 major markets according to the Real-Time Housing Market Report, jointly published by Altos Research, the premier source for real-time real-estate market research, and market analysis consultancy Real IQ™.

Prices fell at the fastest rate in San Francisco, down 4.6% during the 4th quarter. Prices also fell by more than three percent in the Las Vegas, San Diego, Los Angeles and Detroit markets during the most recent three month period.

Data in the Real-Time National Housing Market Report is based on analysis of over one million properties currently listed for-sale in 20 metropolitan markets across the country. The report is the most timelysource of housing market data on current market activity.

The report also found that the time-on-market increased in virtually all markets. Miami experienced the longest time-on-market span with an average days-on-market of 143 in December. Minneapolis and Detroit both had the second highest average days-on-market at 136.

“Sellers continue to adjust their price expectations downward but not quickly enough to keep pace with declining demand,” said Stephen Bedikian, partner and research director for Real IQ. “Until we see
declines in both inventory levels and days-on-market, we won’t have any confidence that supply and demand are balancing out.”

For-sale listed property inventories declined in most markets during the past three months except in the Florida markets of Tampa and Miami which posted inventory increases of 10.5% and 4.0% respectively.

Inventories declined dramatically in Boston with a decrease of 21.7%. Inventory also fell more than 15% in Minneapolis, Denver and Seattle. “Declining inventory levels are essential to a recovery in the housing market,” said Michael Simonsen CEO and co-founder of Altos Research. “However, if the economy continues to slow or enters a recession, we may see inventories balloon again in the Spring and downward pricing pressure on sellers will intensify.”

The report examines housing pricing, inventory levels and market conditions in 20 major U.S. metropolitan statistical areas (MSAs): Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington, DC. The first report was published December 7, 2007 and will be released every month.