Case-Shiller: San Diego Shows Small Month-to-Month Price Increase

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – November data is released in January).

Here are the basic Case-Shiller stats for San Diego County as of November:

November 2010
Month to Month: Up 0.1%
Year to Year: Up 2.6%
Prices at this level in: March 2003
Peak month: November 2005
Change from Peak: Down 36.1% in 60 months
Low Tier: Under $317,102
Mid Tier: $317,102 to $482,590
Hi Tier: Over $482,590

Ninteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between October and November (vs. 20 September to October). San Diego’s 0.1% increase was the only month-to-month gain. The same four markets as last month posted slight year-over-year gains: San Francisco, San Diego, Los Angeles, and Washington DC.

Here’s a look at the latest local tiered data, back through 2000:

SD-Case-Shiller-Tiers_2010-11

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

SD-Case-Shiller-Tiers_2010-11

Although the low and high tier both showed slight gains, the middle tier fell in November. Month to month, the low tier was up 0.9%, the middle tier fell 1.2, and the high tier increased 0.3%.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Case-Shiller-Redfin-Markets_2010-11

Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

Case-Shiller-Peak-Declines_2010-11

Not every city has hit a new low yet, but it’s pretty clear at this point that they’re all falling again. It will be interesting to see how things shape up in 2011 if the government resists the urge to throw a bunch more money at buyers or attempt some other “fix” to correcting home prices.

Methodology: The Case-Shiller index tracks price changes in sets of homes of similar size and style to better determine changes in what people are willing to pay for the same home over time. If data is available from an earlier transaction for the same home, the two sales are paired and treated as a “repeat sale.” Repeat sales that are too far apart, sales between family members, lot splits, remodels, and property type changes (e.g. from single-family to condos) are excluded from the calculations. All remaining repeat sales are totaled together and weighted based on the time between each sale, then the data for the most recent three months is averaged together to create a given month’s index value (i.e. – September’s index represents the average of the data from July through September).

The three price tiers plotted in the charts below simply represent the top, middle, and bottom third of all sales, based on the initial sale price. In other words, if there were 3,000 sales in the three-month period, 1,000 of them would be in the low tier, 1,000 in the middle tier, and 1,000 in the high tier, by definition.