December 26, 2007
October S&P/Case-Shiller: San Francisco MSA And Price Tiers Fall
According to the October 2007 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 2.1% from September '07 to October '07 and are down 6.2% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 6.7% (having fallen 1.4% from September).
Miami surpassed Tampa in October, reporting a double-digit annual decline of 12.4%. Tampa followed with -11.8%, Detroit with -11.2% and San Diego with -11.1%. Six of the metro areas are now posting double digit declines in their annual growth rates. Atlanta and Dallas finally entered negative territory, with declines of 0.7% and 0.1%, respectively, leaving only Charlotte, Portland and Seattle as the MSAs still experiencing positive annual growth rates.
Prices fell across all three price tiers for the San Francisco MSA.
The bottom third (under $604,785 at the time of acquisition) fell 5.3% from September to October (down 17.0% YOY); the middle third fell 2.2% from September to October (down 7.2% YOY); and the top third (over $853,245 at the time of acquisition) fell 1.2% from September to October (up 0.8% YOY).
The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA).
∙ Broadbased, Record Declines in Home Prices in October [Standard&Poor's]
∙ September S&P/Case-Shiller: San Francisco MSA And Price Tiers Fall [SocketSite]
First Published: December 26, 2007 9:39 AM
Comments from "Plugged In" Readers
Any way to get a scale on that? Looks logarithmic and that may no longer be necessary:)
I wish they had condo prices altho usually those prices fall more then single family.
Posted by: cooper at December 26, 2007 11:59 AM
"SF is Different and special blah blah blah"
Posted by: hkjhjkhkjhjkhk at December 26, 2007 12:11 PM
"The bottom third (under $604,785 at the time of acquisition) fell 5.3% from September to October (down 17.0% YOY)"
So, folks who purchased a 600k 1-bedroom shack condo(condos probably worse off than low tier homes in this data) with cheap carpeting and drywall interiors in foggy outer richmond with no parking or Washer/Dryer have now lost slightly over $100,000 in equity while being stuck paying 1.5-2x the equivalent monthly rent in mortgage/interest/insurance/taxes on an asset with ongoing depreciation
No wonder Bernanke is scared and the EU Central bank pumped half a trillion ($500,000,000,000) into their system last week
Posted by: kjhjkhkhjkh at December 26, 2007 12:19 PM
So just to say up front I've been a SFO housing bear for a while. Back when prices were still rising I blogged here we could see a 15% to 20% decline. But I looked at this data..and got the raw stuff from S&P. Say if you look at the upper tier. Assume a 7% nominal increase to end of year 2008 so 1.07^7 =172. Well the index in October is all the way down to 188. That's really only another 10 points (2-3 of which may have already happened in Nov/Dec) before it starts looking reasonable. Maybe I have done some math wrong. I have always been bad at getting formulas wrong, mixing/matching
Posted by: Cooper at December 26, 2007 12:26 PM
What interests me is how the upper end seems 'teflon-coated.' The last time I remember the market being this shaky (in the early 90s), it was the entry-level market (districts 4 and 10 houses and condos in all neighborhoods) that remained relatively robust. Now it seems to be the other way around.
I know. . . the rich get richer and the poor get poorer.
Posted by: Cece Blase at December 26, 2007 12:41 PM
Cooper: I think the traditional paradigm about condos rising in value last and dropping in value first should be questioned at this point. This observation was based on historical data prior to the mid 1980's where condos were a very small portion of the housing stock and were generally marginal construction quality in marginal locations. In the last 25 years there has been a huge construction boom of high quality condos in good locations. Not only are the condos better quality and in better locations, but they are such a large part of the overall market now that they are not the unusual/pioneering housing investment that they used to be. I don't think you're going to see that big difference in appreciation/depreciation anymore between houses and condos, but hey, that's just my $0.02.
Posted by: Miles at December 26, 2007 12:45 PM
If you look at the raw data while the lower end got hit earlier, it looks like the upper end is catching up fast. And if I'm reading it correctly, the lower end actually appreciated more int he last 8 years than the upper tier did.
Posted by: cooper at December 26, 2007 1:05 PM
cooper, the low end went out of line, and what's exactly why it is coming back to earth. Top tier is dropping a little bit but pretty much flat.
Cece, in the last bubble, in LA, the high end came down first, then recovered first.
Posted by: John at December 26, 2007 2:28 PM
People relax: 525 Laidley Sells For Over Asking!
All is well with SF RE.
Posted by: anon at December 26, 2007 3:42 PM
From September, to October? Haven't we seen this before?
Posted by: fluj at December 27, 2007 1:54 PM
Fluj, I don't think so. Not even 1990 or 1991 saw a Sept-Oct CSI drop that was this steep. What did you have in mind?
Posted by: Trip at December 27, 2007 2:27 PM
I thought we already discussed the October stats. And when you say "September to October" you actually are saying "September."
I'm confused. Plus, these number do not match what the MLS shows.
Posted by: fluj at December 27, 2007 3:09 PM
Never mind. YOY. Got it.
Posted by: fluj at December 27, 2007 3:10 PM
By the way, if you look at the SF numbers only for SFRs it's more of what we have been seeing all quarter namely volume down, median up. And if you factor in condos it is a difference of only 32 sales. In fact, YOY '07 to '06 CONDO sales saw a big spike in sale price and a small increase in volume.
Posted by: fluj at December 28, 2007 1:21 PM