Vegas, Miami top home price losers

Miami, Las Vegas, Phoenix, San Diego, Los Angeles and Detroit: You're all a bunch of losers.

Let's relish our feelings of cheap superiority. Home prices in those 6 cities all fell more steeply than ours did in the Tampa Bay area.

That's the message from Tuesday's release of the S&P Case-Shiller Index. Case-Shiller is a bit of a laggard. They're still stuck on January home sales while Realtors are already analyzing February's data. But I like how the index measures our region against 19 others in the U.S.

Tampa prices were off 15 percent year over year. Miami and Las Vegas were the worst off with 19.3 price declines. Phoenix was next worse at 18.2 percent down. Only Charlotte's homes gained in price the past year. Here's the full chart.

According to Case-Shiller's counting methods, our prices are back to what they were in the Spring of 2005. In other words, if you bought a house three years ago and held it since then, you likely haven't made a dime on it.

Comments

"They're still stuck on January home sales while Realtors are already analyzing February's data."

Realtors can get up-to-the-minute data and do their own analysis. Volume appears steady yet slow, while inventory is again piling up. Predictibly, prices have dropped further from end of Feb to now... roughly 2-3% locally. A rather disturbing rate if it continues.

[James Thorner]

Thanks for the clarification. What I meant was the data available to the general public from Realtors.

[Fuzzy Bear]

According to Case-Shiller's counting methods, our prices are back to what they were in the Spring of 2005.

That means in order for property values to fall back to the long term growth rates, property values must fall back to the 2000 levels.

What is interesting is that the 2-3% drop in Feb. underscores that the correction has a long ways to go before the "affordability" becomes apparent and the large disparity in property values and rental cost become more in-line.

When that happens, property will begin to sell at a more brisk pace.

[Fuzzy Bear]

"They're still stuck on January home sales while Realtors are already analyzing February's data."

Month to month is not a good way to provide a clear view of the market. A year to year view provides a more accurate view as to how the market is reacting.

The S&P Case-Shiller index provides that view and it clearly shows that the property values are still in a decline and are heading further south.

Bottom line, if you bought last year, you lost money!

[john]

Fuzzy wrote:
"That means in order for property values to fall back to the long term growth rates, property values must fall back to the 2000 levels."

How did you come up with the 2000 number?

That's great news, Mr. Sunshine! ;)

[Chenups]

You missed the most important point. Who in their right mind wants to live in Tampa when Miami or Vegas are superior cities?

[James Thorner]

Lots of people are leaving Miami and Broward and moving to Tampa to avoid congestion, fears of crime and high prices. We wrote a story last year highlighting that phenomenon. But it's true that if you're into nightlife and fine dining, Miami and Vegas have got us whupped.

..running some quick March *numbers for Hillsborough County..
With five days left in the month, and only using single family homes (no condos or land, etc.)
*not including FSBOs

Sold: 410
Avg. SqF: 1,989
Avg. Listing Price: $274,709
Median LP: $209,000
Avg. Selling Price: $258,594
Median SP: $199,900
Avg. Days on Market: 136

Last Month Totals?

Sold: 550
Avg. SqF: 1,998
Avg. LP: $280,950
Med. LP: $219,900
Avg. SP: $263,649
Med. SP: $207,000
Avg. DOM: 140

2.08% drop in price so far this month. A rather poor performance for 1Q which will no doubt be drilled by the media creating more fear-driven price capitulation. Near bottom? Summer should pick up and election time has the potential for renewed hope.

"~Remember Red, hope is a good thing, maybe the best of things, and no good thing ever dies"

Continuing..

1Q 2008 (through today) compared to 1Q 2007:

Volume: -39.24%
Mean SP: -8.82%
Med. SP: -13.54%
Avg. DOM: +50.61%

>insert pithy comment HERE:

[Fuzzy Bear]

How did you come up with the 2000 number?

Look at the long term growth rate and it will bring you back to 2000 pricing just to be back in-line with the long term growth rate.

As a matter of fact, the S&P Case-Shiller reports also mention that housing prices need to fall back to 2000 pricing levels just to be back in-line with the long term growth rate.

In the Tampa Bay market, property values have increased 138% since 2000. Property values have dropped 15% in the last year.

All one needs to do is the math and you can see that we have a long ways to go before the market corrects. Has your fixed income or salary increased 138% since 2000? For the majority of people, the answer is no and there lies the affordability issues I keep mentioning. Add in the higher costs of taxes and insurance and the affordability becomes much more worse for the consumer.

[Fuzzy Bear]

But it's true that if you're into nightlife and fine dining, Miami and Vegas have got us whupped.

But Tampa has Ybor 7th ave. which is a breeding ground for DUI's.

Fuzzy,

RE: Shiller: While it may be true that to fall back on the graph, prices would need to go back to 2000 levels (late 2000, BTW)- that is the *national* figure. The bay area was historically below the national average and underwent a correction at the same time as the boom. While prices may drop to 2000 levels nationally, it will likely be 2003 prices locally. University of Florida just came out with a report stating that they expect one more season of lackluster sales data before reaching bottom and a LONG wait to return to 2005 pricing. I think the consensus is the same on this blog. Time will tell.

[Fuzzy Bear]

University of Florida just came out with a report stating that they expect one more season of lackluster sales data before reaching bottom and a LONG wait to return to 2005 pricing.

The property values were in-line with incomes and rental costs up to 2000 when they began the rapid appreciation of 138%. Incomes went the opposite direction and are now in negative areas and are not keeping pace with inflation.

I do not agree with the assumptions and theory of the UOF report simply because it does not add up to what the pubic is saying on the streets, etc.

I agree with your statement of time will tell, but based on what I am seeing, housing prices still have a long ways to fall before we reach the "affordability" level.

Buying now is risking losing money or being upside down. People need to understand their own financial risk levels and act accordingly when making the decision to buy or wait.

I hear a lot about "affordability". Of course, there are a large number of factors that determine this, i.e. mortgage rates, incomes, equity/capital, etc. One thing to keep in mind is the actual demographic of in-migration. Many of those come higher-income metros and have the cash. Their problem is selling their current homes before they move down. As far as first-time buyers, upgraders, or current renters already here, affordability is an issue the market is currently correcting. Another factor in that market is simply buyers lowering their expectations. They will be buying smaller homes that they can afford, not Nohl Crest (as their CEO opined in another article).

UF agrees that buying now is a risk of temporary negative equity, however that predition would continue for only one more quarter. Again, time will tell. Perhaps good, basic advice would be to rent if you plan on moving again within the next 3 years. (wasn't this always the case?) After that, it's rather likely you will recoup your costs and maybe some additional equity. If you plan on living at the new home forever, waiting for absolute bottom could mean losing a deal on the right home.

"People need to understand their own financial risk levels and act accordingly when making the decision to buy or wait."

- Great advice.

[Fuzzy Bear]

Perhaps good, basic advice would be to rent if you plan on moving again within the next 3 years. (wasn't this always the case?)

I would put that number out further than three years to more like ten years simply because it takes more than three years to recoup your closing costs. I ran a situation where the rent was $1,195 per month and the new house was $200K. The buyer put 20% down with the assumption that the property would increase 2+% year over year.

The results in an appreciating market is it would take 8+ years just to break even. Based on todays market, the buyer would be upside down at the 8+ years and a break even would be more along the lines of 14 years.

By the way, this was a real case and the risk model clearly detailed the risks.