Case-Shiller: Bay Area Home Prices Plummet Again

It’s time once again for our 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. – December data is released in February).

Here are the basic Case-Shiller stats for the San Francisco area* as of December:

December 2008
Month to Month: Down 3.8%
Year to Year: Down 31.2%
Change from Peak: Down 40.4% in 31 months

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 (March 2002).

According to the Case-Shiller index, as of December home prices in San Francisco have “rewound” nearly seven years. This is easily the furthest into the past that prices have gone in any of the eight cities Redfin serves.

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 our final 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.

The last half of 2008 has been like some sort of thrill ride for home prices in the Bay Area. I have a feeling that the results have not been especially thrilling for home sellers, but I’m sure potential home buyers are enjoying every minute of the ride to the bottom, wherever that ends up being.

*[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.]

February City/Neighborhood Price Reductions

Let’s take our monthly 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. 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 122 cities/towns we ranked in the Bay Area this month, 69 (57%) had price-reduced ratios of fifty percent or more. Aptos held its top spot from last month’s top ten, while Morgan Hill, Rio del Mar, and Alamo also carried over from last month.

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

Of the 115 neighborhoods we ranked in the Bay Area this month, 59 (51%) had a price-reduced ratio of fifty percent or more. Country Club Crest carried over its #1 spot in the top ten from last month, while Rossmoor and Oak Grove made a repeat appearances as well.

There is definitely some consistency in the number of homes seeing price reductions month to month in the cities and neighborhoods around the Bay Area. If finding a good deal on a home is important to you, these neighborhoods might be a good place to start, as higher ratios of reduced-price homes indicate sellers that need to sell and are willing to lower the price to do so.

Meet Redfin’s Partner Agents in the Bay Area

Our customers keep asking us, “When are you coming to my area?” Well, the wait is over for folks in Solano, Sonoma/Napa, and Santa Cruz counties. Redfin is now partnering with agents in outlying areas beyond our local agents’ reach to bring our values of fanatical service, data-driven performance and better value to your neighborhood.

Many Applied, Few Were Chosen

We put our partners through the ringer by conducting in-person interviews and requiring at least three customer referrals; the average Redfin partner in the Bay Area has completed over 250 deals. All of our partner agents have embraced Redfin’s transparency ideal: you see every transaction and every customer review, good and bad. Just like with Redfin’s own agents, there’s no obligation. In addition to getting great service, you’ll also save money — usually around $1,000-$2,000.

Learn more about our partner agent program by reading Redfin CEO Glenn Kelman’s blog post.

If you’re an agent and you’d like to become a Redfin partner, please get in touch.

Sign up to be notified when we come to your area because in the next three months, Redfin will be adding partner agents in Monterey County.

Partner Agents Serving Solano, Sonoma/Napa, and Santa Cruz Counties

	Luana Serving Solano County Homes Closed: 90+ Experience: 7 years
	Mickey Serving Solano County Homes Closed: 27+ Experience: 6 years
	Bob Serving Sonoma and Napa Homes Closed: 450+ Experience: 25 years
	George Serving Sonoma and Napa Homes Closed: 66+ Experience: 5 years
	David Serving Santa Cruz County Homes Closed: 125+ Experience: 8 years
	Michael Serving Santa Cruz County Homes Closed: 134+ Experience: 14 years

Biggest Discounts February Update

Let’s have an update on where buyers are currently getting the biggest discount off the asking price. Our goal in sharing this data is to help potential buyers to know which neighborhoods are softer in terms of sale price discounts off list price, to better equip you when making an offer, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from the last two months in Redfin’s Bay Area service area and sorted it by city. (Usually we sort by zip code, but this month I was unable to obtain zip code data.) We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any cities with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

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

There is a definite trend of more expensive cities showing the largest discounts in the Bay Area. None of the top ten cities with the largest discounts had an average list price below $500,000, and four came in over $1 million.

Here are the ten cities with the smallest discounts:

17 of the 60 cities we ranked came in with discounts under 2%, indicating that either buyers are more willing to pay asking price or sellers in those regions are better at pricing their homes appropriately to the market in the first place. Only East Palo Alto, Castrovaey, and San Lorenzo had homes that sold on average for more than asking.

Only two of the top 10 cities where homes sold for low discounts or over asking had an average list price above $400k (Daly City and Castrovaey).

Of the 3,838 sales we tracked in the 2-month period, 78 homes sold for 20% or more off the asking price, while 1,122 homes sold for more than asking.