Case-Shiller: One Year of Price Gains Wiped Out in a Month
Time for a monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI).
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 San Francisco area* as of October:
October 2008
Month to Month: Down 4.2%
Year to Year: Down 31.0%
Change from Peak: Down 36.1%
The following chart shows the San Francisco HPI scaled such that the May 2006 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the San Francisco HPI was at or lower than it was in the latest data (June 2002).
October’s large price drop in San Francisco effectively erased almost an entire year of price gains. In September, San Francisco’s Case-Shiller HPI was at the same level as May 2003. In October, it was at June 2002. Ouch.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare San Francisco’s performance to other areas across the country:
And here’s one more chart, in which I have lined 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.
With October’s steep drop, San Francisco’s total decline of 36.1 is now just barely behind San Diego’s drop of 36.4%, having reached that level six months sooner.
Looking at this latest data, there still does not appear to be any bottom in sight for San Francisco home prices. In fact, price declines are gaining steam. If you are a seller that took your home off the market for the winter hoping for a rebound in spring, the current trends point toward continued disappointment. Of course, for buyers continued price drops means continually better deals to be found.
*[Case-Shiller defines San Francisco 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.]
replayer said:
I imagine that this trend will continue until housing levels get closer to historic norms of affordability. Now that the jumbo-conforming is now at 625K, pricing in the Bay area market will be further stressed. In addition, there are the layoffs that have yet to be truly felt in the local market.
December 30, 2008 6:08 PM
Michelle said:
So according to the first Case Shiller graph, “San Francisco” is now trading at 2002 levels? Dream on! I realize that this has to be a composite which includes the exurbs like Coco, but even there 2002 pricing is probably the floor, and that is the worst hit county with SF and the Peninsula much higher. These charts never seem to really represent what is going on around me.
January 2, 2009 11:46 PM
Frank said:
“These charts never seem to really represent what is going on around me.”
Which illustrates exactly the reason people use composites and charts. It is a much more accurate representation of what the market is doing, as compared to the (very!) tiny subset that is made up by ‘those around you.’
January 5, 2009 8:39 AM
Kemp said:
Note the “San Francisco” area for Case-Schiller includes SF, San Mateo, Marin, Contra Costa and Alameda Counties.
Some areas in Alameda and Contra Costa Counties especially have been BRUTALLY hit with price declines of easily 50% since the peak in many areas.
From what I have observed, the lesser-desired areas have been hit much harder than those areas considered “nice”. I am figuring this is the “crime discount” being added in rapidly in areas where crime is anticipated to surge.
January 6, 2009 4:20 PM
Mark said:
Lots of 2 or 3 year arms and subprime in Conta Costa. The areas that have ‘only’ fallen 10-20% so far mostly had 5 year arms written in 2005-2007. 30% were negative amortization (option ARM), which is just as bad as subprime.
It’s really not that hard to see how this will unfold 2009-2011. Contra Costa is probably near bottom. San Francisco has just begun.
January 9, 2009 10:24 AM
John said:
“Which illustrates exactly the reason people use composites and charts. It is a much more accurate representation of what the market is doing, as compared to the (very!) tiny subset that is made up by ‘those around you.’”
actually wrong. It would be more accurate to look at charts by zip code.
The only thing garnered from composite chart is that Contra Costa county is hit hard. It’s impossible to tell what’s going on in San Francisco proper.
February 7, 2009 5:38 AM