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.
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.
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]