Category: Market Statistics

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February Case-Shiller Report Released

The small decline in the Index reading from December 2012 to January/February 2013 is due to seasonal market factors, not a decline in values, and occurs every year. Generally speaking, January and February sales reflect offers accepted in the holiday season period from Thanksgiving to early January, and since the higher end of the market tends to check out for this period, sales prices in the first 2 months of the year are typically lower. Based on the heat of the market since the year began, we expect to see a similar pop in C-S values in March and April that we have already seen in median sales prices.

Note: The numbers on the 2 charts below are based upon the January 2000 value of homes being calculated at 100. Thus the number 144 signifies a value 44% above that of January 2000; the number 184 signifies 84% above January 2000. However, a decline from 184 to 144 equals a 22% decline in value from one point to the other.

Before trying to apply Case-Shiller Index trends to specific cities, neighborhoods and homes — which can be deeply misleading — please read the explanation of how the Index works: http://www.paragon-re.com/Case_Shiller_Index_Deciphered_for_SF

San Francisco home values have significantly out-performed the overall Case-Shiller Index metro area over the past 12 to 18 months.

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Noe & Eureka Valley charts

Updated numbers table and graph for houses in Noe & Eureka Valleys. Note that of the houses reporting square footage (which usually runs from 60%-75% of all sales), the average size dropped 12% in the 1st Quarter from 2012’s average size. This will typically affect dollar per square foot (increasing it, because smaller homes usually generate higher dollar per square foot values) as well as average sales price (lowering it because smaller houses sell for less). One quarter’s data is not definitive, though the trend upward is clear.

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Averages are very general statistics that may fluctuate for other reasons besides changes in value. There is no “average house” or “median house” consistent from year to year, of which sales can be annually compared to calculate exact changes in market values. Statistics are most useful for ascertaining market trends over the longer term.

The only way to assess the approximate fair market value of any particular house is by a comparative market analysis crafted to its particular – and in San Francisco, often relatively unique – specifications.

DOLLAR PER SQUARE FOOT ($/sqft) is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, lot size, or patios and decks — though all these can still add value to a home. These figures are usually derived from appraisals or tax records, but are sometimes unreliable or unreported altogether.

All things being equal, a house will sell for a higher dollar per square foot than a condo (due to land value), a condo higher than a TIC (quality of title), and a TIC higher than a multi-unit building (quality of use). Everything being equal, a smaller home will sell for a higher $/sqft than a larger one. However, all things are rarely equal in SF real estate. There are often surprisingly wide variations of value within neighborhoods and averages may be distorted by one or two sales substantially higher or lower than the norm, especially when the total number of sales is small. Exact location within a neighborhood, condition, curb appeal, amenities, parking, views, lot size & outdoor space all affect $/sqft home values.

All data is from sources deemed reliable, but may contain errors or omissions, and is subject to revision.

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January Case-Shiller Index Released

The just released Case-Shiller Index reading for January for the high-tier price segment of the 5-county San Francisco Metro Statistical Area declined slightly from December. This reflects seasonal market issues, not a decline in values, and it occurs every year – indeed, the decline was smaller than what is typical.

From January 2012 to January 2013, the Index indicates an 11% increase in house values for this segment of the metro area market. However, the real estate market of the city of San Francisco itself has outperformed the general market of the 5-county metro area. And due to its methodology, the Index is 4 to 7 months behind what is currently occurring in the market. In a quickly appreciating market, that can be a long period of time.

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Our full report on the Case-Shiller Index is here: http://www.paragon-re.com/Case_Shiller_Index_Deciphered_for_SF