Big drops in San Diego, Los Angeles, Dallas, Portland, Phoenix, Boston. Prices going down faster than they’d spiked? No way. Oops.
This is the first month in this cycle that the S&P CoreLogic Case-Shiller Home Price Index, which lags reality on the ground by 4-6 months, is showing house price declines in all the metros in the index.
In Seattle, the month-to-month plunge was the steepest on record (-3.8%). In San Francisco, the month-to-month plunge (-4.3%) was the third-steepest on record, outdone only by the two worst months during Housing Bust 1 in 2008. In San Diego (-2.8%), Los Angeles (-2.3%), Phoenix (-2.1%), and other metros, the plunges were the worst since Housing Bust 1. And the declines are spreading across the country to other metros, including Dallas, Boston, Washington D.C., and Las Vegas.
These are serious declines for the Case-Shiller Home Price Index, where each month is a rolling three-month average which irons out the month-to-month variability.
Today’s release of the index was for “August,” which consists of the three-month average of closed home sales that were entered into public records in June, July, and August. Due to the delay between when a deal is made and when the “closed sale” is entered into public records, the time span for “August” roughly covers deals made in May through June. During that time, the average 30-year fixed mortgage rate reached the 6% range. Today, we’re at 7%, and mortgage bankers are frazzled.