CFAH

Following a year of strong gains, San Francisco home prices moderated in January according to the latest S&P/Case-Shiller Home Price Index. According to the Index, single-family home prices in the San Francisco MSA rose 0.1% from December 2012 to January 2013. Up 17.5% year-over-year, the SF Index remains 32.5% below a May 2006 peak.

For the broader 10-City composite (CSXR), home values gained 0.2% from December 2012 to January 2013, up 7.0% year-over-year, down 29.9% from a June 2006 peak.

After more than two years of consecutive year-over-year declines, New York reversed trend and posted a positive return in January. The Southwest (Phoenix and Las Vegas) plus San Francisco posted the highest annual increases; they were also among the hardest hit by the housing bust. Atlanta and Dallas recorded their highest year-over-year gains.

Economic data continues to support the housing recovery. Single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013. Despite a slight uptick in foreclosure filings, numbers are still down 25% year-over-year. Steady employment and low borrowing rates pushed inventories down to their lowest post-recession levels.

On a month-over-month basis, prices rose across the bottom and middle tiers in San Francisco but fell for the top.

S&P/Case-Shiller Index San Francisco Price Tiers: January 2013 (www.SocketSite.com)

The bottom third (under $383,942 at the time of acquisition) gained 1.1% from December to January (up 20.8% YOY); the middle third gained 1.6% from December to January (up 16.4% YOY); and the top third (over $681,776 at the time of acquisition) fell 0.9% from December to January but remains up 10.8% year-over-year versus up 9.1% in December.

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back near February 2001 levels, down 52% from an August 2006 peak; the middle third is back to May 2003 levels, down 33% from a May 2006 peak; and the top third is back to May 2004 levels, 20% below an August 2007 peak.

Condo values in the San Francisco MSA ticked up 0.3% from December 2012 to January 2013 and are up 23.4% year-over-year but remain 23.4% below a December 2005 peak.

S&P/Case-Shiller Condo Price Changes: January 2013 (www.SocketSite.com)

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 Accelerate in January 2013 [Standard & Poor’s]

Comments from Plugged-In Readers

  1. Posted by eddy

    What year did they increase the cap on capital gains exemption on homes? What other major economic policies have been passed over the past 15 years that would have made home ownership more attractive?
    Overall, it seems the market is performing much like I would have expected. It’s probably a little more ‘up’ than I would have predicted and I suspect we’ll see more sideways than growth. Not sure if we’ll get back to those 07/08 highs anytime soon. It’s clear now the lower third was the biggest pop in the market. Sadly, those are the ones who can least afford those types of hits.

  2. Posted by lol

    Last year was a pretty impressive catch-up. With low inventory we’ll see if high seller expectations will be met by buyer desperation. I still see places in contract within in a week and others selling a bit slower.

  3. Posted by BigV

    And the mission is continue to undergo an amazing transformation, especially in the South East around 24th — walking around you see a house or two being renovated on almost every block. This trend is picking up speed this year.

  4. Posted by curmudgeon

    Re: what BigV said….yes, last week I saw the South East Mission called out for the first time by name as a distinct “hot neighborhood” in a real estate listing. I’m predicting a more poetic real estate name very soon. SEMIZ? El Corazon?
    In any case, I’ve lived in it for two years now, and the transformation is remarkable.

  5. Posted by rabbits

    Some time ago there was a jokester here that referenced the PPI – the Porta Potty Index. That index is hockey-sticking in Eureka valley right now.

  6. Posted by REpornaddict

    what happened to the graph showing YOY increases over time?
    would make pretty interesting reading again, I thikn the 17.5% we’re at is what was achieved in 2010 also..
    [Editor’s Note: Misinterpretation of the graph seemed to be running at an all-time high, we’re trying to pick a substitute.
    In terms of year-over-year changes for the index in San Francisco, the high-water mark was January 2001 at which point it was up 31.2 percent (versus an index high in May of 2006), the low-water mark was in January of 2009 when it was down 32.3 percent (versus an index low in March of that year).
    The index was up 18.3 percent year-over-year in April of 2010, it was down 5.9 percent at the beginning of 2012.]

  7. Posted by Willow

    eddy, I initially thought we were going to have sideways movement in pricing for several years to come but I’m not so sure…
    I’ve done the open house Sunday circuit over the past couple of weeks in Miraloma, Noe & Mission in SF and Rockridge in Oakland and the psychology of the market has definitely changed, and continues to gain significant momentum. Buyers are again swarming but I still think they seem a little circumspect and haven’t lost sight of what happened only a few short years ago. All of the properties I looked at are still active.
    Not quite 2006 yet but things look like they are heading in that direction. Can it be sustained? I think so but economically there is still uncertainty with europe, the budget sequester and the inevitable pull back in the stock market. Getting financing is no small effort also even for those who have 20% down, strong income streams and lots in savings. Of course it’s a moot point for many of the properties featured on SS where buyers are coming in with all cash. Interesting times ahead…

  8. Posted by Dan

    I don’t see evidence of prices moderating for the SF MSA: condos up 23.4% and houses up 17.5% YOY seems like pretty robust growth. And friends who just went under contract to buy a house faced competition comparable to the last bubble years.

  9. Posted by hangemhi

    good lord, does anyone here still believe case shiller reflects the local market in real time? It is a bay area indicator of what happened 3+ months ago. Try buying a single family home in the outer sunset of all places and watch it sell for 10% more than the comps. “moderated” my a@@.

  10. Posted by The Milkshake of Despair

    Of course there’s a lag in the C-S information. It takes a while to sort the apples from the oranges. Their methodology also smooths out the bumps.

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