According to the S&P/Case-Shiller Home Price Index, single-family home values in the San Francisco MSA ticked up a nominal 0.2% from November to December 2013, gaining a total of 0.5% in the fourth quarter of the year. Up 22.6% on a year-over-year basis, the San Francisco Index remains 17.3% below a May 2006 peak.
For the broader 10-City composite, home values were unchanged from November to December and remain up 13.6% year-over-year. At the same time, S&P’s summary headline has changed from “Winter Shows No Signs of Cooling in Home Prices” to “Home Prices Lose Momentum” in the course of a month.
“The S&P/Case-Shiller Home Price Index ended its best year since 2005,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “However, gains are slowing from month-to-month and the strongest part of the recovery in home values may be over. Year-over-year values for the two monthly Composites weakened and the quarterly National Index barely improved. The seasonally adjusted data also exhibit some softness and loss of momentum.
After 26 months of consecutive gains, Phoenix posted -0.3% for the month of December, its largest decline since March 2011. Phoenix once led the recovery from the bottom in 2012, but Las Vegas, Los Angeles and San Francisco were the top three performing cities of 2013 with gains of over 20%. The Sun Belt, with the exception of Dallas, Miami and Tampa, saw lower annual rates in December when compared to their November numbers. The six cities with the highest year-over-year figures saw their rates decline (Las Vegas, San Francisco, Los Angeles, Atlanta, San Diego and Detroit) and most cities ranked at the bottom improved (Denver, Washington and New York) – Charlotte and Cleveland were the two exceptions.”
While home values ticked up for the top and bottom thirds of the San Francisco market, they slipped again for the middle, the second monthly decline since February of 2012.
The bottom third (under $492,740 at the time of acquisition) gained 0.9% from November to December (up 33.5% YOY); the middle third dropped 0.5% from November to December (up 24.6% YOY); and the top third (over $793,393 at the time of acquisition) gained 0.4% from November to December, up 17.8% 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 were unchanged from November to December 2013, the third month in a row without any gains. That being said, condo values remain up 24.6% year-over-year and within 4.8% of their 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).