Look at the Numbers

A professor counseled us to determine what the numbers say for ourselves instead of listening to the opinions of others, and I encourage you to do the same. The Case-Shiller composite index just came out so... I took the liberty of converting to a more understandable format – the actual price during each period assuming each area’s price started at $100,000 three years ago. This makes it easy to really see what has happened.

Here are the data:

	3-years earlier	2-years earlier	1-year earlier	3-months earlier	1-month earlier	Apr-11
Washington DC	$ 100,000	$ 83,105	$ 89,176	$ 90,199	$ 90,059	$ 92,770
San Francisco	$ 100,000	$ 71,954	$ 84,904	$ 81,010	$ 78,859	$ 80,200
Atlanta	$ 100,000	$ 85,276	$ 85,497	$ 81,179	$ 81,131	$ 82,470
Seattle	$ 100,000	$ 83,188	$ 80,829	$ 75,411	$ 74,053	$ 75,260
Denver	$ 100,000	$ 95,067	$ 99,229	$ 95,515	$ 93,830	$ 95,200
Cleveland	$ 100,000	$ 89,519	$ 95,635	$ 90,537	$ 88,121	$ 89,170
New York	$ 100,000	$ 87,659	$ 86,730	$ 85,119	$ 83,666	$ 84,310
Dallas	$ 100,000	$ 94,899	$ 98,114	$ 94,727	$ 93,700	$ 94,140
Minneapolis	$ 100,000	$ 77,921	$ 85,639	$ 81,354	$ 75,749	$ 76,090
San Diego	$ 100,000	$ 79,994	$ 89,387	$ 86,970	$ 85,229	$ 85,570
Los Angelos	$ 100,000	$ 78,719	$ 84,845	$ 83,911	$ 82,865	$ 83,080
Portland	$ 100,000	$ 83,982	$ 83,640	$ 77,663	$ 75,871	$ 75,970
Phoenix	$ 100,000	$ 64,748	$ 68,220	$ 62,940	$ 62,154	$ 62,210
Boston	$ 100,000	$ 92,292	$ 96,774	$ 95,902	$ 92,866	$ 92,680
Miami	$ 100,000	$ 72,736	$ 72,366	$ 70,500	$ 68,494	$ 68,350
Charlotte	$ 100,000	$ 90,038	$ 88,034	$ 84,454	$ 82,514	$ 82,250
Tampa	$ 100,000	$ 78,661	$ 76,802	$ 72,281	$ 71,135	$ 70,850
Chicago	$ 100,000	$ 81,342	$ 80,052	$ 76,964	$ 73,501	$ 73,200
Las Vegas	$ 100,000	$ 67,832	$ 62,055	$ 59,885	$ 58,648	$ 58,220
Detroit	$ 100,000	$ 74,579	$ 72,330	$ 72,135	$ 68,926	$ 66,920

The bad news, most of the lows have occurred in the subject month or one month prior. Translation: it isn’t the bottom until there is an uptick.
The good news is the declines are diminishing which usually portends a bottom.
The other good news is diminishing declines portend smaller declines going forward. I wouldn’t put much credence in the Chicken Little “another twenty percent drop to go” theorists.
But don’t take my word for it. Draw your own conclusions. My professor would be proud of you.