Bruce Krasting takes note of a fascinating, searchable database provided by the Federal Housing Finance Agency:
I think it is inferior to the Case-Shiller index in terms of measuring what is actually going on month over month. However, the FHFA gets its data from their own pool of mortgages. Given that FHFA represents more than 50% of all mortgages (Fannie+Freddie+FHLB=$5.9 Trillion) they have a unique database. The good news is that they have packaged this up on their website so that anyone can check out trends on both a city by city or a state by state basis.
The graph above was produced from the data for Illinois and, as you can see, it illustrates a roughly 10% drop for a $1 million house from the first quarter of 2006 through the first quarter of 2010. Clicking on it will give you a somewhat larger image. Bruce includes a number of graphs for various states and the District of Columbia. Those he includes show sharp drops in value except for Texas, which has shown great stability (although that appears to have changed somewhat in recent months which are not reflected in the database) and DC (natch).
However, I think the database should be used with caution. Like a fan dancer, the database promises to reveal while actually concealing. The scale of the Y-axis varies from state to state to keep the graphs within the same footprint. This makes California’s 40% decline over the period look very much like Illinois’s 10% decline.
What the graphs show is a neat case in point of something I’ve been saying around here for some time: what we’ve seen in the economy and, particularly, in housing over the period of the last three or four years isn’t so much a national crisis as a local crisis with national implications. To my mind that means the “one size fits all” solution which is what Washington is likely to produce is peculiarly unsuited to the problem at hand. California, Arizona, Florida, and Nevada have all seen precipitous declines in housing values. Texas—not so much. Prescribing a solution tailored to the problems in California, Arizona, Florida, and Nevada but implemented nationally can have wildly unforeseen consequences in other markets.
And anyone who’s ever uttered the words “a good neighborhood” implicitly understands that not only are the problems not statewide, they aren’t even countrywide and can even vary from street to street.
Housing will always be a good investment in some neighborhoods. That’s not in dispute. The notion that housing everywhere, regardless of location, will always appreciate in value is what’s in question and the answer to the question has always been apparent: there ain’t no such thing as a free lunch.
Very cool. My former area of residence on the east coast of Florida declined by 60% since 2006 and prices are currently about where they were in 2001.
Hmmm. My city (Springfield, IL) is ranked #1 on the house pricing index for the last year, growing a robust 2.68%. Dave’s going to attribute that to government, but I think the thing is that the city has always had inexpensive housing (the median and mode price is probably just over $100k) and typically prices increase only one or two percentage points a year. There’s not much bust w/o a boom.