Executive Summary

• The need for real time residential real estate data has never been greater. Yet, the primary US metro benchmarks, the S&P/Case-Shiller (CS) Home Price Indices, will finally update with September numbers on Tuesday, November 29th.
• Parcl Labs forecasted September updates based on the CS10 methodology and we expect continued price declines across 8 of the 10 primary CS markets.
• The most dramatic month over month (MoM) declines are observed in regions such as Washington, DC, San Diego, Los Angeles, and Boston registering declines of 2.3%, 1.9%, 1.9% and 1.8% respectively.
• Miami continues to be resilient, up 1% in September. San Francisco (+0.9%) is showing signs of some stabilization relative to the dramatic drop (4.3%) experienced in August.
• The housing market in key CS10 markets, most notably San Fransisco, has shifted significantly since September. Parcl Labs real-time analysis reveals that San Fransisco prices saw signs of life in October but has since declined nearly 10%  and has broken through what appears to be an area of support around $950/ppsqf, recording 2022 lows.
• Real estate prices are increasingly volatile and dynamic based on local market factors. You deserve timely, accurate, and precise insights to inform your real estate decisions. Parcl Labs provides data and analysis you can trust — our August predictions were within 50 basis points for 7 out of 10 markets, and we were directionally correct on 9 out of 10 markets.

Timely Real Estate Prices Matter

The need for real time residential real estate data has never been greater. On Tuesday, November 29 at 9:00am EST the S&P/Case-Shiller Home Price Indices will update with September numbers.

We at Parcl Labs didn’t feel like waiting to see what’s happening in housing markets across the US. We used our real time Parcl Labs data, reconstructed what we could glean from the opaque Case Shiller methodology, and predicted the numbers that will be reported for all Case Shiller 10 metro areas for September (scheduled to be reported on November 29th). This report gives us insight into how markets are evolving for single family, repeated sales homes that fall outside the definition of home flipping (turnover time of less than 6 months) during what continues to be one of the most volatile periods real estate has ever experienced.

September Case Shiller Market Highlights

• The Chicago market will record its largest decline since October 2012.
• The rate of deceleration in Denver will slow in September. However, the Denver market still witnesses rates of decline not seen since February 2012.
• Boston, LA, and Las Vegas will record price declines not seen since 2009
• New York remains resilient, with expected flat MoM prices in September.
• San Diego will record price declines on track with levels last experienced in 2009.
• San Francisco recovers slightly after significant losses in August.
• Miami continues to hold strong, up 1% MoM in September.
• DC experiencing declines not seen since December 2008

Trouble Ahead: Volatile Market Conditions in November Highlight Need for Timely Reporting

Parcl Labs ingest millions of real estate datapoints every day to produce our Parcl Price Feeds. Our approach is objectively more timely and more comprehensive than the Case Shiller — Parcl Price Feeds **refresh daily** and account for new construction, renovated houses, and multi-family residences.

Real-time Parcl Price Feeds for key CS10 markets, specifically San Fransisco and Miami, highlight the perils of relying on lagged reporting methodology, as seen with Case Shiller.

San Fransisco has demonstrated drastic real estate price changes from September to end of November 2022. This current day market volatility, visualized in the Parcl Price Feed chart below, will be completely missed by individuals who view San Fransisco’s September Case Shiller results in isolation. From October 23rd to November 23rd, we have observed a nearly 10% price decline in San Fransisco.

Miami has also witnessed volatile market conditions in Fall 2022, with an October dip and rapid early November recovery. Unlike San Fransisco, Miami’s market outlook may be even more positive than indicated by its modest Case Shiller September price increase. Parcl Labs analysis reveals that Miami is currently nearing its 2022 all time highs, remaining resilient to macro headwinds which negatively impacted most other housing markets.

While this blog is focused on predicting Case-Shiller’s September results, we encourage readers to follow Parcl Labs Twitter for real time market insights.

Transparency Matters

Estimate Ranges for September

We carefully track our estimates against published numbers. Outlined below is our error rates for 2022 for the CS-10 metro areas. We continue to refine our approach based on our past performance and increased understanding of the Case Shiller methodology.

Applying these error rates to our September estimates gives us a range of possible values we feel the Case Shiller indices will fall within for each market:

Parcl Labs August Prediction Performance

In 7/10 markets, we were off by 50 basis points or less. We were directionally consistent in 9/10 markets. New York was the only market we were directionally off. We did a thorough analysis of the approach for New York and discovered we had an inconsistent definition with the published Case Shiller methodology on what the NY MSA covers.

We have since gone through and explicitly mapped the stated counties leveraged by the Case Shiller Index into our definition as opposed to leaning on MSA geometries.

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