Case-Shiller: Bay Area Showing Early Signs of Eventual Bottom?
It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, hit the S&P/Case-Shiller website.
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. – March data is released in May).
Here are the basic Case-Shiller stats for the San Francisco Bay Area* as of March:
March 2009
Month to Month: Down 2.2%
Year to Year: Down 30.1%
Change from Peak: Down 46.1% in 34 months
The following chart shows the Bay Area 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 Bay Area HPI was at or lower than it was in the latest data (May 2000).
At 2.2%, March’s month-to-month drop was the least severe seen in the Bay Area since July of last year. However, that didn’t stop the overall price “rewind” from pushing back into early 2000. As we pointed out last month, due to Case-Shiller’s broad geographical region for their San Francisco data, it is quite likely that there are some portions of the Bay Area that currently have prices rolled back into the ’90s.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare the Bay Area’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.
Following a trend we have seen down in SoCal, the Bay Area’s year-over-year drops actually appear to be moderating in recent months. March’s 30.1% drop was lower than February’s 31.0%, which was itself lower than January’s 32.4%. This is definitely a trend we will be keeping our eyes on in order to spot signs of an eventual bottom as early as possible.
*[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.]
MJD said:
You could change the headline to “Bay Area home values continue to decline at near-record rate” and it would be just as accurate if not more so.
May 26, 2009 10:14 PM
vp said:
100 is just the level of 2000. It’s not bottom. It could go lower than 100, min number is 0!
May 26, 2009 10:36 PM
vp said:
100 is just the level of real estate price in year 2000. It’s not bottom. It could go lower than 100, min number is 0!
May 26, 2009 10:37 PM
JA said:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/26/MNRB17JFHB.DTL
May 27, 2009 6:57 AM
Thomas said:
Really 46% drop for “San Francisco”??? Really??? Because I live in the Bay Area and we’re not anywhere close to that. I’ve read Shiller’s methodology and I think what people don’t understand is that his index tracks the places that went up the most and are falling the hardest. SHILLER’S INDEX DOES NOT TRACK THE BROADER MARKET. Try getting into any desirable neighborhood with expectations of 46% down. Will. not. happen.
May 27, 2009 12:29 PM
Jeremy R said:
Thomas, you are a bit confused.
the reason Case Shiller is reporting 46% is precisely because they ARE considering the broader market! Vallejo, Santa Cruz, Santa Rosa, Livermore, Brentwood, are all considered to be “San Francisco”, and many of these homes have fallen tremendously. If you say a Case Shiller of San Francisco proper you would see more like 15% drop. D10 has fallen at least 30%, while pac heights hasn’t fallen at all, but there are only 2 sales a month in rich areas, so why even include them in an aggregate market metric anyway?
Case Shiller is by FAR the best metric out there. Median is an absolutely terrible metric.
May 29, 2009 11:30 AM
Ed said:
Ultimately, most house purchases need someone with a job to make a payment – mortgage or rent. Investors that do not rent are a smallish minority. So, prices will be linked to current job losses.
June 9, 2009 6:07 AM