January 28, 2014

San Francisco Home Prices Tick Up, Condos And Middle Market Slip

According to the S&P/Case-Shiller Home Price Index, single-family home values in the San Francisco MSA ticked up 0.4% from October to November 2013. Up 23.2% year-over-year, the San Francisco Index remains 17.5% below a May 2006 peak.

For the broader 10-City composite, home values dropped a nominal 0.1% from October to November and are up 13.8% year-over-year but remain 20.4% below a June 2006 peak.

Despite the slight decline, the 10-City and 20-City Composites showed their best November performance since 2005. Prices typically weaken as we move closer to the winter. Las Vegas, Los Angeles and Phoenix stand out as they have posted 20 or more consecutive monthly gains.
Beginning June 2012, we saw a steady rise in year-over-year increases. November continued that trend with another strong month although the rate of increase slowed. Looking at the year-over-year returns, the Sun Belt continues to push ahead with Atlanta, Las Vegas, Los Angeles, Miami, Phoenix, San Diego, San Francisco and Tampa taking eight of the top nine spots. Detroit continues to recover but remains the only city with prices below its 2000 level.

While home values ticked up for the top and bottom thirds of the San Francisco market, they slipped a bit at the middle, the first month-over-month decline since February of 2012.

S&P/Case-Shiller Index San Francisco Price Tiers: November 2013 (www.SocketSite.com)

The bottom third (under $496,154 at the time of acquisition) gained 0.3% from October to November (up 34.5% YOY); the middle third dropped 0.2% from October to November (up 25.3% YOY); and the top third (over $800,957 at the time of acquisition) gained 1.0% from October to November, up 18.5% year-over-year.

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back to July 2003 levels (37% below an August 2006 peak); the middle third is back to September 2004 levels (18% below a May 2006 peak); and the top third is just below June 2005 levels and 5% below its August 2007 peak.

Condo values in the San Francisco MSA slipped 0.3% from October to November 2013 but remain up 24.8% year-over-year and are within 4.8% of a December 2005 peak.

S&P/Case-Shiller Condo Price Changes: November 2013 (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).

Winter Shows No Signs of Cooling in Home Prices [Standard & Poor's]

First Published: January 28, 2014 7:15 AM

Comments from "Plugged In" Readers

Curious if the majority of homes / properties in SF are owner-occupied or rented. I assume the latter. If property values are still going up in general, then property taxes are going up as well so should rent move in concert?

Posted by: anonymous at January 28, 2014 12:01 PM

^Proposition 13 says no, if property values are going up in general, property taxes do not necessarily go up by any meaningful amount.

Posted by: annon at January 28, 2014 2:06 PM

My property taxes jumped 20% for the 13/14 tax year.

Posted by: Rillion at January 29, 2014 8:50 AM

Yeah, those whose homes had dropped in value and got a property tax reduction in the past several years should now see their taxes bumped back up. All proper under Prop 13. Good news for the tax coffers. Not great news for these property owners -- although complaining that your property values have risen will likely fall on deaf ears.

Posted by: anon at January 29, 2014 9:05 AM

^ good to know. I bought at the trough but always wondered if the bubble buyers who got a reduction in 2010-1011 would be adjusted back after the market recovery. The county tax collector has a brain after all.

Posted by: lol at January 29, 2014 9:35 AM

Yeah, pretty hard to complain that my property taxes jumped because I am no longer underwater. It has been interesting to see the hot SF housing market finally spread to the lower end properties.

Posted by: Rillion at January 29, 2014 11:28 AM

Very happy for you! I imagine it would be more than a bit stressful to be underwater. FWIW, my property taxes suck too. 5X the taxes on the place we sold (bought two years ago, so I guess I'm getting a little bit of a Prop 13 discount compared to anyone who bought more recently, but not like I used to get).

Posted by: anon at January 29, 2014 12:15 PM

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