CoreLogic S&P Case-Shiller Home Price Index Update

The CoreLogic S&P Case-Shiller Home Price Index does not evaluate median sales price changes, but employs its own proprietary algorithm to measure home price appreciation over time. Since its indices cover large areas – for example, the San Francisco Metro Area is comprised of 5 counties – which themselves contain communities of widely varying home values, the C-S chart numbers do not refer to specific prices, but instead reflect prices as compared to those prevailing in January 2000, which are all designated as having a consistent value of 100. A reading of 250 signifies that home prices have appreciated 150% above the price prevailing in January 2000.

Case-Shiller divides all the house sales into thirds, or tiers: The third of sales with the lowest prices is the low-price tier; the third of sales with the highest sales prices is the high-price tier; and the third in between is the mid-price. The price ranges of these tiers change as the market changes. The 3 price tiers experienced dramatically different bubbles, crashes and recoveries over the past 18+ years, to a large degree determined by how badly the tier was affected by the subprime financing crisis. The low price tier was worst affected – huge bubble, huge crash, most dramatic recovery – and the high price least affected (but still significantly affected).

Most house sales in expensive counties such as San Francisco, Marin and San Mateo, as well as affluent communities in other Bay Area counties are in the “high price tier”, and many would qualify for an “ultra-high-price tier,” if such existed. All counties, to varying degrees, have sales in all 3 price tiers.

The Index is published 2 months after the month delineated – the May 2019 index was released 7/30/19 – reflects a 3- month rolling calculation, and one month’s sales generally reflect accepted-offer activity in the previous month. The Index is looking into a rear-view mirror at the market 3 to 5 months ago: The May 2019 reading, released in late July, mostly reflects market conditions in February – April 2019.

The 5 counties in our Case-Shiller Metro Statistical Area are San Francisco, Marin, San Mateo, Alameda and Contra Costa: Alameda and Contra Costa are by far the largest markets; SF itself comprises only about 7% of house sales in the metro area. We believe the Index generally applies to other Bay Area counties, such as Sonoma and Santa Clara, though those 2 have had somewhat softer markets over the past year. There are hundreds of unique real estate markets in such a broad region, with different dynamics, moving at varying speeds, sometimes in different directions. How the C-S Index applies to any particular property is impossible to know without a specific comparative market analysis.

San Francisco Median Home Prices Hit New Peaks – Compass Q2 Market Report

High stock markets, low interest rates, surging luxury home sales, limited inventory, a spring full of unicorn IPOs, and San Francisco – once again -hits new highs in median home sales prices.

July 2019 Update

After 2 quarters of no or negative year-over-year home price appreciation, a confluence of positive economic factors sent San Francisco median home sales prices to new peaks in Q2. On a quarterly basis, the median house sales price hit $1,700,000 – $80,000 above the previous peak in Q2 2018 – powered by a monthly high of $1,770,000 achieved in June. For condos, the new quarterly median price peak was $1,250,00 – slightly above last year’s $1,235,000 – fueled by a new monthly high of $1,300,000 in June.

The market typically slows down significantly in San Francisco for the summer holidays through August before picking up again in September for a busy, though relatively short autumn selling season running through mid-November.

Median Home Sales Price Trends

Sales & Prices by Property Type & Bedroom Count

Average Dollar per Square Foot Analyses

San Francisco Luxury Home Sales
Hit New Peaks in Q2 2019

The first chart below breaks out luxury homes as defined by houses selling for $3 million and above, and condos, co-ops and TICs selling for $2 million or more.

The second chart looks at all home sales of $5 million plus.

Selected Supply & Demand Statistics

Average days on market – all sales (chart 1), then broken out by property type and price segment (chart 2). Changing a pattern seen in recent years, Q2 2019 often saw the strongest buyer demand in higher price segments, instead of the more affordable price ranges.

Sales price to original list price percentages by property type and price segment – these statistics generally mirror those seen above in the days on market analysis. Some of these percentages are stupendously high, reflecting torrid bidding competitions between buyers for appealing new listings.

Percentage of Listings Accepting Offers
(i.e. Going into Contract)

Percentage of Active Listings
with 1 or More Price Reductions

The effect of over-pricing – as signified by price reductions prior to sale – on the average sales price to list price percentage, average days on market, and average dollar per square foot values.

Mortgage Interest Rate Trends since 1981

San Francisco Bay Area Home Prices
by City, Town & Selected City Neighborhoods