While the pace of increases has continued to slow from the record setting gains recorded in April and May, single-family home and condo values in San Francisco continued to climb in July.
According to the latest S&P/Case-Shiller Home Price Index, single-family home values in the San Francisco MSA rose 2.2% from June to July 2013. Up 24.8% year-over-year, the San Francisco Index remains 19.0% below a May 2006 peak.
For the broader 10-City composite (CSXR), home values gained 1.8% from June to July and are up 12.3% year-over-year but remain 22.0% below a June 2006 peak.
The Southwest continues to lead the housing recovery. Las Vegas home prices are up 27.5% year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8%, 20.8% and 20.4% respectively. However, all remain far below their peak levels.
Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined. More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked.
Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing. The Fed’s announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favorable, impact on housing.
On a month-over-month basis, prices ticked up across all three San Francisco price tiers.
The bottom third (under $474,575 at the time of acquisition) gained 4.2% from June to July (up 40.0% YOY); the middle third gained 2.5% from June to July (up 28.6% YOY); and the top third (over $799,304 at the time of acquisition) gained 1.7% from June to July, up 18.8% year-over-year versus 18.1% in June.
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back near April 2003 levels (40% below an August 2006 peak); the middle third is back near August 2004 levels (19% below a May 2006 peak); and the top third is back above April 2005 levels (6% below their August 2007 peak).
Condo values in the San Francisco MSA rose 2.3% from June to July 2013 and are up 29.1% year-over-year, within 6.4% of their 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).
∙ Home Prices Steadily Rise in July 2013 [Standard & Poor’s]
∙ Spike In Sales Due To, Rather Than Despite, A Spike In Rates [SocketSite]