Case-Shiller: Prices Still Increasing (at Slowing Rate)

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Keep in mind that all of the charts in this series of posts are based on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted data, hit the S&P/Case-Shiller website (requires free registration). For an explanation of how the Case-Shiller data 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 the Bay Area* as of November:

Fourteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between October and November (three more than October). Detroit, Washington, Miami, Tampa, Chicago, and New York all marked seasonally-adjusted drops month-to-month.

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

All three tiers increased in November, with the low tier again getting the biggest boost, up 1.8% in a month, and the middle tier not far behind, increasing 1.3%. The high tier was up 0.7%.

Here’s a look at the seasonally-adjusted month-to-month figures in Redfin’s markets, with annotations of the beginning and the original end of the homebuyer tax credit, so you can see that I’m not just making stuff up when I say that the effects of the stimulus are wearing off.

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

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.

Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:

San Francisco, San Diego, and Los Angeles still appear to be on the rise, but elsewhere in the country, the summer 2009 price boost seems to have run out of steam.

*[Case-Shiller defines the San Francisco Bay Area as the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area, which includes all of the following counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.]

Google Perspective Imagery Comes to Oakland

Last month Google launched “perspective imagery” San Jose and San Diego. Last Friday they announced that they added Oakland, Sacramento and Portland. This means for those of you looking for homes for sale in Oakland you can now see angled imagery shot from a low flying plane on Redfin:

Biggest Discounts by City in November

Let’s check in on our stats to find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from the month of November in the Bay Area and sorted it by city.

Methodology
First, we compiled a list of every sale that took place in the month, calculating each sale’s sale-to-list ratio (based on the final list price). Next, we simply take an average of every individual sale’s sale-to-list ratio to calculate an entire area’s sale-to-list ratio. Any sales that came in with a sale-to-list ratio above 150% or below 50% are excluded from the calculation, and areas with fewer than twenty sales are excluded from the top and bottom ten rankings. Interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rose slightly from our last update (based on August sales), but still remained negative, moving from -1.0% to -0.8%.

Here are the ten areas with the smallest discounts:

I’m not really sure what’s going on in Bay Point and San Lorenzo, but sellers there appear to be under-pricing their homes by a pretty good margin. In the 53 areas we ranked, the median discount was -0.2%.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and check out the appropriate “Full” sheet.

Of the 4,891 sales we tracked in the 1-month period, 867 homes sold for 5% or more off the asking price, while 1,114 homes sold for 5% or more above the asking price.

Case-Shiller: Prices Rose a Bit More as Tax Credit Neared Expiration

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Keep in mind that all of the charts in this series of posts are based on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted data, hit the S&P/Case-Shiller website (requires free registration). For an explanation of how the Case-Shiller data 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. – October data is released in December).

Here are the basic Case-Shiller stats for the Bay Area* as of October:

Eleven of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between September and October (the same number as September). Dallas, Atlanta, New York, Boston, Las Vegas, Cleveland, Miami, Chicago, and Tampa all marked seasonally-adjusted drops month-to-month.

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

All three tiers in the Bay Area rose over 1% from September to October, increasing at annual rates ranging from 16% for the high tier to a whopping 29% for the middle tier! I think by now most observers are keenly aware that increases like this are not sustainable. It will be interesting to see how long they last this time around.

Here’s a look at the seasonally-adjusted month-to-month figures in Redfin’s markets (welcome Atlanta!), with annotations of the beginning and the original end of the homebuyer tax credit, so you can see that I’m not just making stuff up when I say that the effect of the tax credit on home prices appears to be waning.

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

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.

Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:

The excellent economics news site Calculated Risk posted a great roundup on Sunday of 2009’s various government programs intended to prop up home prices, and when each is currently allegedly going to end. With the housing credit expiring next spring, mortgage-backed securities (MBS) purchases ending in the first quarter, and tighter lending standards from the Federal Housing Administration (FHA) on the way, home prices still may be poised to fall a bit further before all is said and done.

*[Case-Shiller defines the San Francisco Bay Area as the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area, which includes all of the following counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.]

November (belated) City/Neighborhood Price Reductions

Let’s have another look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days (as of 11.16.2009). Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 115 cities/towns we ranked in the Bay Area this month, just 11 had price-reduced ratios of fifty percent or more. The median price-reduced ratio was 31.3%.

Getting a little more granular, let’s look at the top ten neighborhoods for price reductions:

Of the 76 neighborhoods we ranked this month, just 8 had a price-reduced ratio of fifty percent or more. The median price-reduced ratio was 30.4%.

Download the full spreadsheet to check where your neighborhood came in (assuming your neighborhood had enough sales to be ranked).

Redfin Partner Agents Arrive in Morgan Hill, Gilroy & Hollister

Great news for folks in the Morgan Hill, Gilroy & Hollister areas: Redfin just partnered with three local agents to help you buy or sell homes. In areas beyond the reach of Redfin agents in the Bay Area, Redfin partners with experienced, local agents whom we have carefully chosen to uphold our standards of outstanding customer service, transparency, and better value.

If you buy or sell a home with a Redfin partner, at closing he or she will provide you with a credit equal to 15% of the gross buyer’s-agent commission, usually worth $1,000 – $2,000.

Check out our coverage area below.

Meet Our Morgan Hill, Gilroy & Hollister Agents

We put our partner agent applicants through the ringer to ensure that you’ll get great service:

• Interviewed in-person by a Redfin market manager
• Completed at least 15 transactions in your area and 5 in the last 12 months
• Gave us email addresses to survey the clients they represented in the last 18 months
• Agreed to survey every new client and publish every review
• Paid based on customer satisfaction; removed from the program for bad reviews

	Deborah Adamo Serving Santa Clara and San Benito County Homes Closed: 40+
	Loren Burks Serving Morgan Hill, Gilroy & Hollister Homes Closed: 50+
	Kasey Stewart Serving Morgan Hill, Gilroy & Hollister Homes Closed: 81+

Apply to be a Redfin Partner

Are you a real estate agent with a commitment to customer service and transparency? We’d love to meet you. Become a Redfin partner.

Case-Shiller: Effects of Tax Credit Appear to be Waning

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). Keep in mind that all of the charts in this series of posts are based on the seasonally-adjusted data provided by S&P. For the full source data behind this post, plus non-seasonally adjusted data, hit the S&P/Case-Shiller website (requires free registration). For an explanation of how the Case-Shiller data 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. – September data is released in November).

Here are the basic Case-Shiller stats for the Bay Area* as of September:

Eleven of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between August and September (down from sixteen in August). New York, Boston, Charlotte, Seattle, Dallas, Portland, Tampa, Las Vegas, and Cleveland all marked seasonally-adjusted drops month-to-month.

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

As the effects of the tax credit and low rates appears to begin to wear off, it’s no surprise to see the high tier begin to flatten out first, since those types of stimulus are likely to have little effect on the most expensive homes.

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

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.

Here’s the flip side of the peak decline chart—a graph of just this year, indexed to January = 100%:

This has been one mother of a bounce in the Bay Area. Seriously.

With the tax credit having been extended until the spring, and pretty much all the benefit having been squeezed from low rates and tax giveaways, it seems likely that we will see some price deterioration in the next few months as we head through winter. Beyond that is anybody’s guess.

*[Case-Shiller defines the San Francisco Bay Area as the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area, which includes all of the following counties: Alameda, Contra Costa, Marin, San Francisco, and San Mateo.]

The October Market Wrap Up

Let’s take at look at some October numbers for single-family houses and condos that sold in the Bay Area and see how they compare to a year ago.

San Francisco County

• 529 homes sold in October
• The median sales price was $690,000, down from $699,000 in October 2008

San Mateo County

• 294 homes sold (through October 20th)
• The median sales price was $580,000, down from $640,000 in October 2008

Santa Clara County

• 1,845 homes sold in October
• The median sales price was $495,000, up from $489,000 in October 2008

Alameda County

• 1,385 homes sold in  October
• The median sales price was $371,000, down from $373,500 in October 2008

Contra Costa County

• 1,613 homes sold in October
• The median sales price was $275,000, down from $281,250 in October 2008

Marin County

• 245 homes sold in October
• The median sales price was $648,000, up from $599,750 in October 2008

We got these numbers from DQNews.

Dig Deeper Into the Trends

These numbers are for county-level trends in the Bay Area. To see what’s happening in your neighborhood, check out our stats & trends pages.

The $8,000 Home-Buyer Tax Credit Has Been Extended & Expanded

Earlier today, President Obama signed new legislation extending the deadline for the home buyer tax credit into 2010 and expanding it to include current home owners who are looking to buy a primary residence.

The Basic Requirements

You qualify for the tax credit if the:

• Home you’re buying will be your primary residence
• Purchase price isn’t more than $800,000

This credit is not a loan; it’s yours, but keep in mind you have to live in your new home for three years. If you sell the home in less than three years, you’ll have to pay back the money.

What’s Changed?

With the new legislation, buyers have more time to find a home and more buyers are eligible for the tax credit:

• New deadline: To qualify, you need to be in contract with a seller by April 30th & close on the home by June 30th (The previous deadline was November 30, 2009).
• Not just for first-time buyers anymore: Home buyers who’ve owned and occupied a home for at least five consecutive years during the past eight years are eligible for a credit up to $6,500.
• Increased income limits: Individuals making less than $125,000 and couples making less than $225,000 are eligible (The limits used to be $75K & $150K).

First-time buyers are eligible for a credit up to $8,000 on homes purchased between January 1, 2009 and June 30, 2010. Qualified homeowners can a credit up to $6,500 on homes purchased between November 7, 2009 and June 30, 2010.

Bonus Link

You can check out the full text of the bill. Scroll about halfway down to sections 11 & 12:

• Sec. 11. Extension and Modification of First-Time Homebuyer Tax Credit.
• Sec. 12. Provisions to Enhance the Administration of the First-Time Homebuyer Tax Credit.

Home-Buyer Activity Picks Up in the Bay Area

This is the first post by Brad Le, one of our Silicon Valley agents. Brad recently joined Redfin and is a lifelong resident of the Bay Area who’s been helping people buy and sell homes for six years.

During this time of the year, we generally see a decline in home sales with a dramatic dip as we get closer to the holidays. This year has been different as things actually picked up as the summer ended.

In the Bay Area, sales of existing homes in September rose 8.4% from September 2008. The Peninsula and South Bay led the way with the largest increases in homes sold from last year:

• 35% increase in San Mateo County
• 19% in Santa Clara County
• 19% in Alameda County

Reasons for the Increase in Home-Buyer Activity

There are a few reasons why the real estate market has remained strong well into the fall:

• Amazingly low interest rates. Most the buyers that I’m working with cite this as the #1 reason (followed by lower homes price) why they’re looking to buy now. Although we’ve seen a 2-week spike in mortgage rates, they are still near all time lows. You can find great info on mortgage rates at freddiemac.com.
• Lower home prices. While many of the lower end sales tend to be driven by short sales and REOs, we’re seeing a lot of well priced normal sales as well. Believe it or not, there are actually a lot of sellers that have lived in their home for 10, 20 or even 30+ years and are now cashing out their equity and buying in areas that they probably couldn’t have afforded a few years ago.
• The Fed’s $8,000 first-time home buyer tax credit. Although Congress has extended the credit, I think this is less of a driving force in the Bay Area where many home buyers do not qualify for the credit since income levels here tend to be higher than the limits imposed by the program.
• Strong local economy. Yes, I know companies are still laying people off, the country is in two wars and California has a major budget crisis. But, people are spending money in stores and on homes. Multiple offers are not just on bank owned homes, but we’re seeing that across the board for homes in San Jose, Mountain View, Palo Alto and all over the Bay Area. And have you seen Google’s and Apple’s recent earnings reports?

I expect things to slow down a bit as we approach the winter holidays, but based on the latest numbers, it will definitely be a busier holiday home-buying season this year compared to last year’s.

Tips for Home Buyers

If you’re in the market right now, here are some things to keep in mind:

• Get your lender lined up before writing an offer. I’ve had to request a lot of loan contingency extensions because the appraisers and lenders are so busy right now. By shopping for a lender before writing an offer instead, you’ll make the closing process smoother and more efficient. Ideally, your lender will have the purchase contract in their hands as soon as the offer is accepted.
• Review any disclosures upfront and have them signed with the offer. Sellers are looking for top dollar, but they also want a buyer who knows what they’re getting into by researching the home.
• Close in 30 days. In most situations, the norm for any offer is 14 days for the contingencies (property contingency can be 10) and a 30-day close. Try not to deviate from this too much unless it’s absolutely necessary.
• Write a cover letter with your offer. It personalizes the offer and can help seal the deal! I recommend this even if it’s not a multiple offer situation.

Do you have any tips for buyers?