According to the December 2011 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA fell 0.8% from November ’11 to December ’11, down 5.4% year-over-year, down 41.1% from a peak in May 2006.
For the broader 10-City composite (CSXR), home values fell 1.3% from November to December, down 3.9% year-over-year, down 33.8% from a June 2006 peak.
With this month’s report we saw all three composite hit new record lows. While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended.
After a prior three years of accelerated decline, the past two years has been a story of a housing market that is bottoming out but has not yet stabilized. Up until today’s report we had believed the crisis lows for the composites were behind us, with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011. Now it looks like neither was the case, as both hit new record lows in December 2011. The National Composite fell by 3.8% in the fourth quarter alone, and is down 33.8% from its 2nd quarter 2006 peak. It also recorded a new record low.
In general, most of the regions also posted weak data in December. Eighteen of the cities saw average home prices fall in December over November. Seventeen of the cities have seen monthly declines for at least three consecutive months. In addition to both monthly composites, 10 of the cities saw home prices fall by more than 1.0% during the month of December. The pick-up in the economy has simply not been strong enough to keep home prices stabilized. If anything it looks like we might have reentered a period of decline as we begin 2012.
On a month-over-month basis, prices were up for the bottom third of San Francisco price tiers, up nominally for the middle, down nominally at the top.
The bottom third (under $311,666 at the time of acquisition) rose 0.9% from November to December (down 4.6% YOY); the middle third rose 0.3% from November to December (down 7.1% YOY); and the top third (over $573,705 at the time of acquisition) fell 0.4% from November to December, down 1.4% year-over-year (versus a 1.9% in November).
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have dropped to May 2000 levels having fallen 60% from a peak in August 2006, the middle third has dropped below March 2002 levels having fallen 42% from a peak in May 2006, and the top third has dropped to January 2004 levels having fallen 26% from a peak in August 2007.
Condo values in the San Francisco MSA fell 1.9% from November ’11 to December ’11, down 7.3% year-over-year, down 37.0% from 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).
∙ Case-Shiller: All Three Home Price Composites End 2011 at New Lows [Standard & Poor's]
∙ S&P/Case-Shiller San Francisco: Homes Dip, Condos Slip In November [SocketSite]