According to the September 2012 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA rose 0.5% from August to September and are up 7.5% year-over-year but remain down 34.4% from a May 2006 peak.
For the broader 10-City composite (CSXR), home values rose 0.2% from August to September and are up 2.1% year-over-year, down 29.8% from a June 2006 peak.

We are entering the seasonally weak part of the year. The headline figures, which are not seasonally adjusted, showed five cities with lower prices in September versus only one in August; in the seasonally adjusted data the pattern was reversed: one city fell in September versus two in August. Despite the seasons, housing continues to improve.

Phoenix continues to lead the recovery with a +20.4% annual growth rate. Atlanta has finally reversed 26 months of annual declines with a +0.1% annual rate as observed in September’s housing data. At the other end of the spectrum, Chicago and New York were the only two cities to post annual declines of 1.5% and 2.3% respectively and were also down 0.6% and 0.1% month-over-month.

Thirteen of the 20 cities recorded positive monthly returns; Boston, Charlotte, Chicago, Cleveland and New York saw modest drops in home prices in September as compared to August; Tampa and Washington D.C. were flat. With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market.

On a month-over-month basis, prices rose across the bottom two San Francisco price tiers with a nominal drop at the top.
S&P/Case-Shiller Index San Francisco Price Tiers: September 2012 (
The bottom third (under $366,247 at the time of acquisition) rose 2.0% from August to September, up 12.2% year-over-year; the middle third rose 1.7% from August to September, up 10.4% YOY; and the top third (over $666,869 at the time of acquisition) slipped 0.1% from August to September, up 5.6% YOY versus 4.7% in August.
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have returned to November 2000 levels (55% below an August 2006 peak), the middle third has returned to February 2003 levels (35% below a May 2006 peak), and the top third remains at May 2004 levels (21% below an August 2007 peak).
Condo values in the San Francisco MSA gained 0.9% from August to September and are up 13.5% year-over-year but remain 25.0% below their December 2005 peak.
S&P/Case-Shiller Condo Price Changes: September 2012 (
Our standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the “San Francisco” index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).
S&P/Case-Shiller: Home Prices Rise for the Sixth Straight Month [Standard & Poor’s]
San Francisco Home Values Tick Up, Condos Up 11.1 Percent YOY [SocketSite]

Comments from Plugged-In Readers

  1. Posted by Nonanon

    Good ole case shiller. Delivering us 3 straight years of once a month nutkickings to our 2009 bears who were confidently screaching that we were “NOWHERE near the bottom”.
    As an aside what ever happened to those guys? Are they the same ones who now inhabit turning that once proud site into a bastion of self loathing trolls who may in truth really be “living in their parents basement”?

  2. Posted by lol

    Bears are a necessary force. The professionals have accumulated a wealth of techniques to become the most efficient in marketing, financing and sale of property. But they are a uni-dimensional force: sell as many houses as you can for as much money as you can. This was going quickly against the interest of individuals who were let down by both the banks and the government who failed to apply their usual checks and balances.
    The bears had their place once the market turned. The intensity of the run up of the bubble years had to be matched with a similar excess of bearishness to get this market down to earth.

  3. Posted by lol

    About the recent numbers.
    Today’s situation is a bit excessive I think. Some of it is a natural catch-up, but I feel we haven’t learned our lesson from 2003-2007.
    The run-up of a bubble is motivated by the chase of profits to come. If you “know” RE historically climbs at 8%/y in your area then you can overbid by 5+% and still be in the money a year later. By doing that, 15%/y becomes the new normal and things accelerate from there.
    The current 20% to 25%/y of more desirable areas is bringing out a new crop of cash-rich investors/speculators. 94114 is now higher than in 2007-2008 for instance. This is lifting all boats and speculators on all levels are coming back.
    Bubble 2.0 here we come? Spring will tell.

  4. Posted by Rillion

    I don’t think the market can continue producing these kinds of yoy gains for much longer. I doubt we are at the beginning of another large bubble, still too much pent up supply waiting to be unleashed if prices keep climbing.

  5. Posted by unwarrantedinlaw

    Fiat currency has always devalued, everywhere, and that’s one way that real estate can rise. Infinitely, in nominal dollars.
    It may turn out that the only way to deal with the 47% of Americans receiving handouts is to continue to pay those handouts, but to devalue the currency. So they’re still getting their checks, but the checks are worth progressively less and less.

  6. Posted by BigV

    don’t forget — the SF tech industry continues to produce lots of real wealth — or at least to relocate wealth from the rest of the world to the pockets of employees, owners, and investors who want to own a home in SF.
    So prices can climb beyond the national rate if you consider that the city is becoming wealthier faster than the rest of the nation.

  7. Posted by lol

    Wow. You know all of these Romney’s statements were pure political rhetoric, right? The election is over. Reality is back on the agenda.
    1 – No inflation. Debt destruction absorbed the additional influx of “fiat” money. Only gold bugs still believe in it.
    2 – Many of these 47% of Americans who do not pay income taxes are retirees living on Social Security. This is not a handout. They paid for it!
    Many others are vets who paid dearly for doing what they did. Not a handout again.
    Now imagine one of your family members (god forbid) suffers a catastrophic illness. You’ll be happy to get a “handout” that you paid for through your taxes.
    But all is clean and well defined in the theoretical world of the “we pay too many taxes for these do-nothings” crowd. Life never throws them a curve ball, right?

  8. Posted by polip

    I’m still waiting for the editor to yield 🙂
    I yielded awhile ago (yes I was a major bear) though I thought the bottom was earlier this year not 2009 – I may well have been wrong about that by 2-3 yrs.
    Nominally the bottom for this cycle is in. Period.
    In real terms, meh, probably flat line for awhile (2% annual inflation, 2% nominal home price gains over the next 5-10 years sounds about right).
    And let’s not get too far ahead of ourselves, very little real wealth was/has been created by mini tech bubble 2.0. Re/mis-allocaton of wealth has occurred. That’s what a bubble is. The smart ones take a piece of the bubble and again reallocate to either the next bubble or a safer asset principal preserving asset class. Right now, discounting transaction costs, that reallocation might be into SF housing/real estate stock. Might.
    And so it goes.

  9. Posted by DataDude

    Thank you, Mr. Bernanke.
    Your attempt to re-inflate the housing bubble via low mortgage rates is working, for now, but it’s only a matter of time before we hear a loud pop sound, or perhaps the slow hiss of a locomotive train, leaving behind a thin veil of sticky goo to cover your face.

  10. Posted by Otis

    “Your attempt to re-inflate the housing bubble via low mortgage rates is working, for now, but it’s only a matter of time before we hear a loud pop sound, or perhaps the slow hiss of a locomotive train, leaving behind a thin veil of sticky goo to cover your face.”
    Damn Straight! People laugh at guys like you and me now, but eventually, we will be vindicated.
    Ive been telling this to anyone who will listen since 1989. And ive been renting ever since because this can kicking can NOT go on forever!!! 1985 nominal prices, here we come!!!

  11. Posted by Helmut

    Renting since 89, wow – you missed a lot of opportunity.

  12. Posted by anon

    Damn Straight! People laugh at guys like you and me now, but eventually, we will be vindicated.
    Eventually we’re all dead. I’m more concerned about what happens during the here and now, rather than eventually being “correct”.

  13. Posted by unwarrantedinlaw

    Look lol, I’m not running for office so I can say what I think, which is that the 47 percenters are lazy whiners, and for the first time in history, they’re obese too. Where this affects real estate is that by taking handouts instead of working, they don’t get to rise up in life. There was a guy the other day who wrote that he has thought of buying but because he’s got such a good deal on a rent controlled apartment, he never did buy. This has and will prevent him from taking part in something that has made millions of Californians into millionaires. So the handouts actually hurt people, they put them in BMR’s or in projects, and then they never get out.
    If you’ve been forced to read Grapes of Wrath as I was, there lots of pages of toil and anguish. But the story continued for real, and those Okies became prosperous, through hard work, but also through owning a lot of California real estate.

  14. Posted by lyqwyd

    Have you actually looked at the charts presented? Condo prices clearly bottomed at the beginning of this year, and SFH prices bottomed on an inflation adjusted (AKA real) basis at the beginning of this year as well.
    I have no argument with the rest of your statement, but there is still inflation, it’s just lower than historical averages. 1.6% 2012, 3.2% 2011, 2012 is looking like it will be about 2%

  15. Posted by anon

    There was a guy the other day who wrote that he has thought of buying but because he’s got such a good deal on a rent controlled apartment, he never did buy.
    I do this as well. But I also own a condo in Seattle, a cabin in Tahoe, and a condo in Hilton Head, SC. I’ll buy if it ever makes sense here, but for now I’d rather spend money to fix up my landlord’s place in exchange for $2500 a month rent for a 3 bedroom. I make more investing my money other places anyway, no need to lock up more than necessary in real estate.

  16. Posted by Rillion

    Otis – “Ive been telling this to anyone who will listen since 1989. And ive been renting ever since because this can kicking can NOT go on forever!!! 1985 nominal prices, here we come!!!”
    Good luck with that.
    “Markets can remain irrational a lot longer than you and I can remain solvent.” – John Maynard Keynes

  17. Posted by lol

    You’re in the “us” against “them” mentality. All people are different. There are a few lazies gaming the system, agreed, but also tons of hard working people. And some people hard on their luck. It can happen to everyone.
    I pay taxes and own property. I even collect rent.
    But I do not look down on the rest because this is where I come from when looking at some branches of my family tree.
    Granny was a war widow raising a single kid but got help from the government. I am almost certain she didn’t pay taxes when she was picking up the pieces of her life. This family branch restarted from there and helped their offspring get a better shot at life.
    Anyone saying she was a lazy whiner has no ides what real life looks like.
    And stop your grandstanding. You look more like Newt Gingrich than Teddy Roosevelt.

  18. Posted by unwarrantedinlaw

    That’s straw man, lol. No-one disagrees with taking care of war widows. The thing is, once the number of people receiving a government check gets too high, the whole thing collapses, like Greece, and then people who deserve it don’t get helped.

  19. Posted by lol

    My grandmother would kick you in the groin for calling her a straw man.
    She was a real person. And much of the 47% are also real people who deserve every bit of what they have. Retired? You deserved it! Unemployed? You paid for your insurance, you deserve it! Pensioned vet? Please let us help you.
    Look closer at the people you accuse of free-loading. You’ll be surprised.
    By the way, not paying taxes does not mean being on welfare. It means you do not make enough to pay income taxes. And you still pay gas taxes, sales tax, maybe SS, etc…

  20. Posted by futurist

    But otis has lost out by renting since 1989. Think of how rich you made your landlord.
    And yes, price increases in the cost of buying a house here in SF MAY not last forever. And then again, they may.
    But neither will any of us. We all bite the dust.
    But while I’m here, I sure as hell glad I bought in 1984.

  21. Posted by 47%

    I’m one of the 47%. I pay taxes, I just don’t make enough to pay income taxes. I pay sales tax, self-employment tax, Medicare, property tax, and even that new CalFire tax.
    I don’t ask for hand-outs. I don’t whine. I look forward to the day that I can pay more taxes.

  22. Posted by sparky*b

    Where do you pay self employment tax if it’s not a part of your income tax?

  23. Posted by Guest666

    Villification of the 47% is the flip side of blaming the “rich” for all of our economic woes. There is a kernal of truth in both, but taking a hard line position stifles any meaningful discussions on how to resolve our current predicament. Unfortunately, the only recourse we have is to raise taxes on the wealthy AND the middle class, and restructure current entitlement programs to become sustainable on a long term basis. That’s the elephant in the room and is not a positive for long term double digit real estate appreciation.

  24. Posted by lol

    The most well off European countries are also the ones with the best social benefits, greatly surpassing the ones in the US. And their debt levels are very manageable. Which totally contradicts the statement that this is partly a crisis of entitlement.
    The truth of the matter is: these countries have maintained “confiscatory” tax rates while staying at the top of the standard of living scale. Sure Norway and Sweden are not the US, but we should look up to their successes instead of discounting them as data points we do not like.
    In the mean time, we have voted ourselves more and more tax cuts. Prop 13, the idiotic Bush Tax Cuts. And we have only debt and crappy healthcare insurance coverage to show for it.

  25. Posted by unwarrantedinlaw

    Romney’s 47% comment killed him because 47% of the nation doesn’t like to be called losers. But they are, I’n not running for office so I can say it, they’re losers. I remain bullish on SF real estate though because I’ve seen these other central places – Moscow, Damascus – which have nasty social policies but the real estate remains sky high. For non-central places like Stockton, though, because people are not there for the weather and beauty of the place, and can move to Dallas where the jobs are.

  26. Posted by Guest666

    It’s not the current debt levels that are the problem, but the trajectory based upon demographics, benefits and funding. Europe is even more problematic when one looks at the demographic trends. As much as it would be nice to add debt indefinitely, this is a situation of “it works until it doesn’t.”
    I’m all for having socialized benefits at some minimum level, but this has to be balanced with the fact that someone needs to pay for these benefits. We have yet to have an adult (ie: math based)discussion as to how this is best accomplished.

  27. Posted by lol

    I did specify 2 countries that do not have demographic challenges.
    Swedish demography, for instance, that used to have the reputation of an aging society, is back to historical growth levels. This happened thanks to a very good social policy.
    And yet they have high taxes, great benefits, and have a perfect balance between revenue vs. expense. They also happen to be very decently wealthy. And no, they are not communists.
    And yet we are pursuing our policies with the lies and excessive simplification of Thatcher, Reagan and Ayn Rand, which have become the line in the sand for even Democrats.

  28. Posted by rabbits

    The only ‘entitlement’ problem we have is our insane health care delivery system. We spend 16-18% of our GDP on this catastrophe (more costs + worse outcomes = catastrophe), while other industrialized nations spend 7-8%. This is over a trillion a year, much of which is spent by the government in some form or another.
    This is the ELEPHANT in the room. Every other program (SS, welfare, disability, SNAP, etc) can be fixed through tweaks or taxes. Health care can only be fixed with a huge overhaul. My fear is that Obamacare didn’t go far enough.

  29. Posted by 47%

    “Where do you pay self employment tax if it’s not a part of your income tax?”
    Self employment tax is the other part of SS that your employer usually pays. I pay it on my business income before the unfortunate whopping medical and other deductions that put me below the line for paying income tax.
    Again, I’d be thrilled to be back paying income tax again. I’d be even more thrilled to be paying some of the extra taxes that go with having a high income.

  30. Posted by lyqwyd

    I was trying to stay out of this one, but I can resist only so much 🙂
    @unwarrented. The whole 47% thing is pure politically misdirection. It’s irrelevant if somebody pays no federal tax, the only important thing is total taxes paid, and a huge portion of those 47% have a higher tax burden as a percent of their total income, than Romney or his supporters. The 47% meme was a loser when he first said it, and it’s loser today. I agree with you that much of our social welfare is mis-spent, but I suggest you find a better way to get your point across than a statement that was partly responsible for Romney losing.
    Sweden and Norway are massive oil and natural gas producers, spend about 1-1.5% of their GDP on military, have export economies, collect 40-50% of their GDP in tax revenue, and both have budget surpluses (due to their oil revenue). They also have fairly uniform societies. They are both so different from the U.S. as to be essentially meaningless.
    We would have to approximately triple the total taxes collected, cut our military budget by 80%, and find huge new oil fields. None of these things are going to happen.
    I’m not opposed to raising taxes to pay for benefits, but we will never be Sweden or Norway.
    You also forget some other European countries that once had great social benefits as well, such as Portugal, Ireland, Italy, Greece, and Spain. They are not doing so well these days. It’s likely that most European countries will see dramatic reductions in benefits in the coming years, even Germany which is the most fiscally sound of the major Euro countries.
    I agree that there is value in social benefits, but they also need to be administered effectively and ensure that they do not expand well beyond their intent, and that free-loaders do not become the majority of beneficiaries.
    The social systems should also be structured such that they encourage people to better themselves, which is the opposite of many of our programs today.
    Most of the U.S. social welfare programs need some major restructuring. Mindlessly defending them is not helpful.

  31. Posted by sparky*b

    47%, I am self-employed, I pay the tax too. But it is an imcome tax, paid with your income taxes. So when you file your taxes you write a check. The self employment tax is part of your 1040, it’s schedule SE.

  32. Posted by lol

    Sure, we can discount Sweden and Norway as outliers, even though I think they are examples we should aim at, not run away from.
    Southern Europe is also culturally very different too, with a huge shadow economy which causes the government to pounce on the few that honestly pay their taxes.
    Let’s look at what is in between: France. Health care costs per person are 50% of the US with better outcomes. Their deficit is comparable to the US, not worse, despite very generous benefits. We should look at how their infrastructure compares to ours: High-speed trains to most regions, high speed internet everywhere 3 times cheaper than the US, cheap power from government-induced nuclear energy. Their tax payers get what they pay for.

  33. Posted by lyqwyd

    I agree we could be doing much better on healthcare, I was tremendously disappointed by the outcome of the healthcare debate. A year of fighting and the major beneficiaries were the insurance and pharmaceutical industries. There were definitely some positives from the plan, but overall it is disappointing and nowhere near where we need to be.
    I wholeheartedly agree that their healthcare system is far superior to ours, and would be a great model for us, but France is financially troubled as well, and while not nearly as bad off as the PIIGS will likely have to cut back on benefits in the coming years.

  34. Posted by lol

    ^ Agreed 100% Obama had the power and yet he compromised. He blew it on Obamacare. Then 2010 happened and he was stuck with more obstructionism for the rest of his agenda.

  35. Posted by polip

    this used to be a housing site
    it’s jumped the shark awhile ago I guess

  36. Posted by Anew

    Obama had a supermajority for like two months due to Ted Kennedy’s passing. As usual, you guys talk too much while getting things wrong. But yeah polip, whoever gave lol, brahma, mod et al the notion that they should weigh in on every single subject was mistaken. Let other people say things sometimes. Gosh.

  37. Posted by lol

    All started from unwarrantedinlaw’s “47%” comment that came out of the blue.
    About the supermajority, Obama could have asked his majority to revamp filibusters (funny how this is coming up today again). Obama wasted his valuable political capital for 2 precious years. Also, he expanded the Bush tax cuts in late 2010 without asking for anything in return, right after his defeat! He did it as a sign of goodwill, lol. For 3 years he always made the first step forward to meet the others in the middle, to be rebuked each and every time.
    In the wake of a major defeat, the GOP fights harder. In 2010, Obama caved in preemptively. He understands that now I think.

  38. Posted by nanon

    I absolutely agree that we want to emulate France and other socialist countries. The solution to unemployment is maximum 35 hour workweeks. I was getting tired of working too hard anyway. Oh yeah, let’s ban homework too. Race you to the bottom!

  39. Posted by anon

    @lyqwyd – you’re right about Norway being an oil exporter, but you’re flat out wrong for Sweden:

  40. Posted by lyqwyd

    Nobody said we should copy France in everything they do, but if you do a little investigation into their healthcare system you will see it is far superior to ours, which is what WAS in fact suggested.
    I stand corrected. Not sure where I got the oil producer for Sweden from as I can’t seem to find any evidence of it now. Doesn’t really change my point though, as Sweden still has an export based economy, low debt, and a budget surplus, which is the similarity it shares with Norway, and the huge difference they both have in comparison to the U.S.

  41. Posted by lol

    I agree with lyqwyd that we shouldn’t follow France on everything they do. Healthcare could be an example where we could at least try and pick a few things. Not everything. I wouldn’t want to be a GP in France, believe me. People are over-medicating because everything is free. Young doctors flee the countryside to clog the cities to avoid too much driving around for house calls that cost time and get you almost no extra income. The French have to work on their system to make it more sustainable. But having one humongous single-payer system is helpful to get the best deals for the citizen.
    About the 35-hour weeks, the results have been that it probably didn’t create any jobs. It wasn’t noticeable because the laws were enacted in 1997 which corresponded to strong growth that itself lowered unemployment dramatically.
    The BIG effects of the 35-hour week were a lot more free time (duh), and a very strong increase in productivity. Bosses pushed for a similar output for less hours. 1 – people worked harder, 2 – there was more investment in automation technology to make up for the lost hours. This created a virtuous circle that pulled France higher the same way Y2K investments helped intensify the tech boom in the US.
    Krugman recently compared France with Italy, comparing productivity levels over time:
    France and Italy are somewhat comparable in terms of GDP, population, culture, industry. The big split between the 2 happened after 1997 when France shortened the work week to 35 hours. It’s no coincidence. France is likely the most productive country in the world. They understood it’s not about clocking hours, but getting stuff done.

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