S&P/Case-Shiller Index Change: January 2012 (www.SocketSite.com)
According to the January 2012 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA fell 2.5% from December 2011 to January 2012, down 5.9% year-over-year, down 42.5% from a peak in May 2006.
For the broader 10-City composite (CSXR), home values fell 0.8% from December to January, down 3.9% year-over-year, down 34.4% from a June 2006 peak.

“Despite some positive economic signs, home prices continued to drop. The 10- and 20- City Composites and eight cities – Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa – made new lows,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices.

“Detroit and Phoenix, two cities that have suffered massive price declines, plus Denver, saw increasing prices versus January 2011. The 10-City Composite was down 3.9% and the 20-City was down 3.8% compared to January 2011.”

“Atlanta continues to stand out in terms of recent relative weakness. It was down 2.1% over the month, and has fallen by a cumulative 19.7% over the last six months. It also posted the worst annual return, down 14.8%. Seven of the cities were down by 1.0% or more over the month.”

On a month-over-month basis, prices fell across all three San Francisco price tiers and the 2.5% aggregate decline was the largest of all Metropolitan Areas in the U.S.
S&P/Case-Shiller Index San Francisco Price Tiers: January 2012 (www.SocketSite.com)
The bottom third (under $302,275 at the time of acquisition) fell 0.7% from December to January (down 4.5% YOY); the middle third fell 1.0% from December to January (down 5.9% YOY); and the top third (over $549,932 at the time of acquisition) fell 2.5% from December to January, down 2.6% year-over-year (versus a 1.4% in December).
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have dropped below May 2000 levels having fallen 60% from a peak in August 2006, the middle third has dropped to February 2002 levels having fallen 43% from a peak in May 2006, and the top third has dropped to November 2003 levels having fallen 28% from a peak in August 2007.
Condo values in the San Francisco MSA fell 1.5% from December ’11 to January ’12, down 6.9% year-over-year, down 37.9% from a December 2005 peak.
S&P/Case-Shiller Condo Price Changes: January 2012 (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).
Case-Shiller: 2012 Home Prices Off to a Rocky Start [Standard & Poor's]
S&P/Case-Shiller San Francisco: Homes Slip, Condos Dip In January [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by diemos

    Waiting to see. What the final answer will be.

  2. Posted by anon

    you must be mistaken. The ree-luh-ters have been telling us that the market is HOT. Now you go spoil everything with more of your facts. Back to 2002 prices just like the national index. SF sher is “different.” why-you-I-oughta . . .

  3. Posted by PPC

    In districts 1,7,8 there is barely any inventory for SFHs and the ones that are for sale are off the market very quickly. Condos are selling fairly well too (district 7/8). My in-laws neighbor’s place, in Pacific Heights, just sold in a week with 6 offers over asking – at a very high price, in my opinion. I guess it still depends on location.

  4. Posted by lol

    Yup, PPC. Overall this market is still very slowly grinding away the last remnants of the bubble. But many local markets are not following this trend. No decent cheap house or condo in NV yet. I was following a 2-unit building last year and expected it to linger a bit. Nope.
    But better opportunities abound everywhere else. You don’t fight emotional new money when you want to invest. I am going on hunting for property out of SF. Plenty of dry powder left and most of the country has become very very well priced. Yeah!

  5. Posted by The Milkshake of Despair

    If you wanted to engineer a controlled unwinding and soft landing of the housing market via fed actions, what you see from mid 2011 onwards is exactly the desired outcome: flat to slightly down.
    I’m not sure whether someone in the fed is doing an excellent job or just got lucky.

  6. Posted by Been there

    As much as i would like to agree with anon, I have to agree with PPC here. I laugh at realtors claiming “hot!” but it is also true in D5 cole valley/ Haight recently. Many properties linger, but enough go quickly that you could say hot for good properties but not junk. Look at recent SFH sales on grattan, cole, beulah. Big prices, multiple bids, and over ask. See condo sales in last month on Frederick, Page, Masonic, Clayton – all multiple bids over ask. Cash buyers in some cases. Maybe these were primo condition, but there is some heat right now. Noe has similar stories, but that’s a different ball of wax.

  7. Posted by Jimmy (No Longer Bitter)

    Who are you going to trust, Case-Shiller or Zillow? My house price is up, I tell you, UP! $980,000 as of last week.

  8. Posted by Rillion

    Well the condos in my complex continue to decline. Last year a 2/1 sold for $395k and this year one is currently on the market and been reduced to $370k so far. Since it doesn’t like prices are going to skyrocket in my complex anytime soon I think its about time to play a little hardball with my 2nd since they are now completely naked as I owe $388k on my 1st.

  9. Posted by Big V

    Houses here in the mission are also selling within days of hitting the market. Even the crappy ones are selling (though a bit slower). That, and renovations everywhere. My block alone has at least 6 properties under significant renovation.
    It is also worth noting that the data presented here is January Sales, meaning these are the deals made in the deadest part of the winter. There has been a *notable* change in on-the-ground activity since January. It would be nice to see some current statistics, sadly we seem stuck in some 1950′s pre-computer era where it takes 2 months for some poor shmuck to add up all the sales on a calculator.

  10. Posted by anon

    houses here in the bayview are selling quickly with lots of overbids and cash buys. Places are going into contract within days except for those that sit forever with no sale. I guess MY neighborhood is the only one bucking the downward trend. Lucky me!

  11. Posted by The Milkshake of Despair

    “…we seem stuck in some 1950′s pre-computer era where it takes 2 months for some poor shmuck to add up all the sales on a calculator.”
    Calculation probably isn’t delaying results. More likely it is marking transactions as apples or not. Someone needs to determine whether a transaction should be thrown out due to a remodel or other factors that could disqualify the property. You can automate part but not all of that process. Ultimately you need humans to review the properties.

  12. Posted by lol

    Zillow is taking so much heat from publishing automatically computed data, I think it’s good to have a source where a human actually arbitrates what’s relevant and what’s not.

  13. Posted by Brahma (incensed renter)

    I’m not an S.F. bull by any means. But diemos, c’mon; what are you trying to say by writing “Waiting to see. What the final answer will be”? Here’s what you wrote at the end of 2008:

    Courage fluj, only 2 and 1/2 more years until I hang up my crystal ball and ride off into the sunset.

    Case-Schiller below 110 and everything in the city 50% off peak prices by 2011

    Posted by: diemos at December 20, 2008 5:49 PM

    Emphasis mine. The above numbers are a full month after the end of 2011 and the Case-Shiller Home Price Level for the SF MSA is still 125.47 (link above, pg 3). Are you calling that “close enough” (≅ 15% off)? Inquiring minds want to know.

  14. Posted by Leo

    You aint seen nothing yet! Wait until rates go to normal ~10%. And they will, once the world realizes they can’t safely loan to bernanke and co. any longer.

  15. Posted by tipster

    I’d like to thank my landlord for taking it on the chin, yet again, for me.
    The average $600K condo losing 2.5% means the landlord ate fifteen thousand dollars in losses in just one month, while the average tenant paid a tiny fraction of that. Now add in another couple thousand dollars in costs (mortgage, taxes, etc), and you can see why I love the guy so much!!

  16. Posted by [anon.ed]

    ^Talk about forcing your foregone conclusion onto whatever comes down the ‘pike. Most people renting condos in this rental market are going to be looking at significant rent increases.

  17. Posted by anon

    boy, the ree-luh-ters and recent buyers are not happy about the facts! Don’t worry. Now it MUST be the bottom. Can’t have more than 3 straight years of being wrong about that, can you?

  18. Posted by [anon.ed]

    ^because CS-MSA trailing by a quarter is where it’s at, right? Sorry, but no. You’re not even talking about what you think you’re being snide about.

  19. Posted by is it the bottom yet?

    I didn’t think CS was meant to be only apples. Is it? And either way, couldn’t mix easily skew the results here?
    Also, don’t the usual asterisks apply? The ones about CS being MSA-wide data. Seems like conventional wisdom around these parts is that CS’ top third is a reasonable proxy for SF proper.
    Finally, although month-over-month data during the winter doesn’t carry a lot of weight, our 2.5% Jan12/Dec11 drop is much steeper than almost every other metro in the CS index. Are banks clearing out backlog and is shadow inventory decreasing in the lesser-priced regions of the SF MSA? What else could be creating this steep drop in the face of so much anectodal evidence that the market in our 7×7 could be starting to pop?

  20. Posted by tipster

    Hmmm, $300 per month rent increase vs. $15,000 per month losses? Are you kidding? That’s the best you can do?
    My landlord SHOULD be raising my rent by $15,000 per month, but he CAN’T. Ha ha, he’s just going to have to eat the difference!
    I’ll be happy to throw him 2% of what he’s losing, with him eating the other 98%. I should really send him a thank you note with every rent payment “Dear idiot, thanks for saving me another $15,000 this MONTH”, but I’m too nice.

  21. Posted by DataDude

    “…42.5% from a peak in May 2006″

  22. Posted by REpornaddict

    Wait..don’t come here that often these days, but is the case Shiller deemed accurate and relevant again?
    I thought it was completely debunked by most on here coincidentally around the time it was showing 15% YOY appreciation a year or two ago.
    Guess I didn’t get the memo!

  23. Posted by Brahma (incensed renter)

    Again, I’m not an S.F. real estate bull nor a real estate agent, but this was too good to pass up without comment. Leo wrote:

    Wait until rates go to normal ≅10%.

    I have no problem at all going on record and predicting that, assuming we’re talking about interest rates on prime home first mortgages in the U.S., this won’t happen for at least ten (10) years.
    I have my money where my mouth is on this one, as I do have the majority of my own money in the bond market. The only way that comes to mind that I could be even more exposed to this position than I am now would be to buy options on bond futures and I’m not “an accredited investor”.
    As best I can recall (no, I’m not a mortgage broker, either), prime home first mortgages haven’t demanded interest rates that high since about 1990.

  24. Posted by Rillion

    DataDude – If you had read the whole post you will see that it breaks out the numbers for houses (SFR) by tiers and that the upper-third, of which both of your examples would be considered, is down by 28% on average.
    The ones that are down the most are the bottom third which are down 60%. So the SFR’s that cost less then ~$300,000 at the time of purchase are the ones that are your ugliest, most worm infested apples.

  25. Posted by [anon.ed]

    “”Dear idiot, thanks for saving me another $15,000 this MONTH”, ”
    Yes. A hypothetical letter to your landlord, disparaging him, about what might happen if he sells right now based upon a CS report from three months ago would be completely rational. So, reading between the lines your rent went up and you’re mad. Got it.

  26. Posted by DataDude

    Rhillion – Thanks, I should have read more closely. (And thanks for not flaming me)
    But even a 28% drop on a D5 or D7 home that was selling for $3 million back in 2006 would mean that same house is selling for $2.16 – it doesn’t seem that we’re seeing that big of a drop.
    Or $5 million in 2006 would be $3.6…

  27. Posted by El Bombero

    Great seeing prices going down in the SF MSA! Down 42.5% from the peak – sweet!!

  28. This is old data. The SF RE Market in March 2012 is definitely and all of a sudden going up across the board (Residential, Office Space, Retail). The index will reflect that in a few months.

  29. Posted by lolcat_94123

    ^ well there you have it. the reality is clearly that things are hot hot hot.

  30. Posted by jumbo

    houses here in the tenderloin are selling quickly with lots of overbids and cash buys. Places are going into contract within days. my neighborhood is doing well and bucking the trend. i am gaining 15000 per month in my investments while i am raising the rates of my renters by 300.
    I am so smart for buying. i can never lose

  31. Posted by george

    Rillion – why don’t you change your handle to BEACON so that we all understand that your comments are pretty worthless as not everyone bought in a lemon building. Condos very close to you at one bedroom sold for 600 and 645. Save your posts or reference your posts. Owners at the Palms and One Rincon should do the same.
    Your post -
    Well the condos in my complex continue to decline. Last year a 2/1 sold for $395k and this year one is currently on the market and been reduced to $370k so far. Since it doesn’t like prices are going to skyrocket in my complex anytime soon I think its about time to play a little hardball with my 2nd since they are now completely naked as I owe $388k on my 1st.

  32. Posted by NoeValleyJim

    I believe that peak prices in Noe were summer of 08, though summer of 07 and summer of 06 were almost identical.
    I can’t find any good data on price per square foot, which would be better than median, but here is an interesting graph:
    http://www.pegasusventures.net/wordpressblog/2011/07/06/noe-valley-comes-roaring-back/
    It suggests that prices dropped almost 40% from peak to trough and are already back to peak pricing in Noe. I personally think prices did not drop that far and have recovered some but not all of that since Winter 2009.
    There is a surprising paucity of real data on the topic.

  33. Posted by Been there

    @jumbo
    Well, not sure if anyone is smart for buying now, but i sure do feel pretty good having sold now after buying twelve years ago.

  34. Posted by *

    “Finally, although month-over-month data during the winter doesn’t carry a lot of weight, our 2.5% Jan12/Dec11 drop is much steeper than almost every other metro in the CS index”
    SF had the worst month-to-month decline of all cities tracked by case-shiller:
    http://seattlebubble.com/blog/wp-content/uploads/2012/03/Case-ShillerHPI_MOM_2012-01-600×436.png
    [Editor's Note: Or as we first noted up above: "On a month-over-month basis, prices fell across all three San Francisco price tiers and the 2.5% aggregate decline was the largest of all Metropolitan Areas in the U.S."]

  35. Posted by Rillion

    “Rillion – why don’t you change your handle to BEACON so that we all understand that your comments are pretty worthless as not everyone bought in a lemon building.”
    Umm cause I’m not in the Beacon nor anywhere close to it. I’m in the Western Addition in a building built in the 80′s. I’m sorry if you feel this blog is only for people that live the nicer neighborhoods and the perspective from someone living in SF ghetto’s is worthless.

  36. Posted by tipster

    The SF MSA had the worst decline of any MSA in the country?
    Geez, that doesn’t seem to match the economic realities of the different MSAs. Seems that something else is at work here.

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