According to the July 2012 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA increased 1.9% from June 2012 to July 2012, up 4.8% year-over-year but 35.1% below their May 2006 peak.
For the broader 10-City composite (CSXR), home values increased 1.5% from June to July, up 0.7% year-over-year, down 30.5% from a June 2006 peak.
Digging into the numbers, 15 cities and both Composites had stronger annual returns in July’s report. New York was the only city with a worse 12-month decline in July than June. Dallas and Washington D.C. saw no change in their annual rates. Cleveland and Detroit saw annual rates decelerate in July versus June, although they remain positive for both cities.
The news on home prices in this report confirm recent good news about housing. Single family housing starts are well ahead of last year’s pace, existing home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. All in all, we are more optimistic about housing. Upbeat trends continue. For the third time in a row, all 20 cities and both Composites had monthly gains. Stronger housing numbers are a positive factor for other measures including consumer confidence.
Among the cities, Miami and Phoenix are both well off their bottoms with positive monthly gains since the end of 2011. Many of the markets we follow have seen some decent recovery from their respective lows – San Francisco up 20.4%, Detroit up 19.7%, Phoenix up 17.0% and Minneapolis up 16.5%, to name the top few. These were some of the markets that were hit the hardest when the housing bubble burst in 2006,
On a month-over-month basis, prices increased across all three San Francisco price tiers.
The bottom third (under $349,250 at the time of acquisition) rose 2.5% from June to July (up 3.2% YOY); the middle third rose 2.2% from June to July (up 5.7% YOY); and the top third (over $636,666 at the time of acquisition) rose 1.1% from June to July, up 4.3% year-over-year versus 3.7% in June.
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back to August 2000 levels (57% below an August 2006 peak), the middle third is back to June 2002 levels (37% below a May 2006 peak), and the top third is back to just below June 2004 levels (21% below an August 2007 peak).
Condo values in the San Francisco MSA rose 2.1% from June to July, up 8.1% year-over-year but still 27.5% 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 Increase Again in July 2012 [Standard & Poor’s]
∙ S&P/Case-Shiller San Francisco: Home/Condo Prices Continue Gains [SocketSite]