Bay Area median home price first annual drop since 2011

Re:Bay Area median home price first annual drop since 2011 by ram_rar on Sunday May 03, 2020 @05:03PM (#23061833)

I am not an expert in this. Feels like, we are in uncharted territory. I was looking at 2 main params to compare Covid crisis with 2007/08 recession.

1. Case Shiller Index for SF area (higher the the value, higher the house price) https://fred.stlouisfed.org/series/SFXRSA

2. Financial Stress Index (Ideally should be around 0. Higher the value means system is financially stressed) https://fred.stlouisfed.org/series/STLFSI2

If you compare this against 2007/08 crisis. The Case shiller index for SF hasnt dropped much at all, even though the stress index is pretty high. Not sure, what am I missing. Would love for HN folks to educate me on this.

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Re:Bay Area median home price first annual drop since 2011 by dbaggerman on Sunday May 03, 2020 @10:24PM (#23063959)

First thing to keep in mind is that the Case Shiller data you linked to only has data up to February. The FSI data is more up to date, but the big upswing was only getting started in late Feb with it being more visible in March/April figures.

The other thing to consider is that housing prices are likely to lag behind financial stress. If people are in financial stress, they are likely to sell off a second car or other luxury possessions before selling their house. Also selling a house takes time, so even when people do start selling they won't be on the market or closing sales straight away.

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