November Housing Market Update: NAR, Case-Shiller & What we’re seeing

November 23, 2009

by Scott Sambucci


Big week in the housing market.  The National Association of Realtors just reported a 10% rise in home sales (as measured by transactions, not price).  Tomorrow brings the release of the S&P/Case-Shiller Home Price Index for September 2009.  Here’s what we’re seeing in the housing market –

An interesting housing market trend this Fall is the convergence of the Price of New Listings (new sellers entering the market) and Price of Listings Absorbed (sellers exiting the market). You can also see how sellers through the Spring and into the summer were more bullish about their ask prices as compared to the exit prices, with this convergence happening more recently in the Fall season:

Median Home Prices 2009

New sellers entering the market each week since the Spring are “learning” – setting their ask prices closer to the market’s exit price and farther from the overall market ask price. Both of these price measures are about 10% below the market median ask price indicating that housing market activity remains in the bottom half of the market. Compare this to a difference of about 3-4% in the Spring market.

Another look at seller behavior is the percentage of on-market sellers that have had a price reduction.  This value is declining, which is a positive sign for sellers – fewer and fewer sellers are feeling the need to drop their ask prices, though the market is still at a 35% ratio, meaning 1 in 3 active sellers have dropped their price at least once in the last 90 day period (since late August):

Price Reductions of Active Home Sellers

So what about the September 2009 S&P Case-Shiller HPI (CSI) to be released this week?

  • Our most recent Real-time Real Estate Housing Report reported a 0.4% decline in October and 0.9% during the most recent three-month period for the Altos Research 10-City Composite Price.  The 10-City Composite tracks the same 10 markets as the CSI.
  • Referring back to the first chart above, Price of Listings Absorbed (PAL) hit its trough in May, concurrently with the trough of the Case-Shiller HPI, rose about 4% from May to September, and has remained level since then. The CSI reported a rise in sold prices every month from April through August in 2009, so it will be interesting to see if the CSI trend continues upward or stabilizes in September.
  • Last month, we expected the recent rise in the CSI to “stemmed a bit” and the data is showing that this trend should continue for the September CSI.

Here’s some additional analysis on home sales over at Calculated Risk.

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