Case-Shiller for April: increases grow more common

The S&P Case-Shiller Index for the San Francisco Metro Area, which covers the housing markets of five Bay Area counties and is divided into three price tiers, was released on the last Tuesday of June. Keep in mind that this index is published two months after the month in question and reflects a three-month rolling average, so it will always reflect the market that was in evidence a few months ago.

The five counties that are featured are San Francisco, Marin, San Mateo, Alameda and Contra Costa. San Francisco is featured in the high-price-tier home market (and are you surprised by this?). As with years dating back to 2012, when the recovery really began in earnest, home prices have dramatically surged in the spring, often followed by a plateau or even a tick down in the following seasons. These surges have reflected frenzied markets of huge buyer demand as well as historically low interest rates and very low inventory as well as a rapidly expanding population and the high-tech-fueled explosion of new, highly paid employment and new wealth creation. We at Paragon predict further increases for the May and June Index reports.

Now let’s look at the longer term. Over six years, the low-price-tier’s bubble was much more inflated by the subprime lending fiasco, which in turn led to a much greater crash than the other price tiers. While dramatic recoveries are being seen in all three tiers, the low and middle tiers are seeing slightly slower recoveries and prices that are below the artificially inflated peak values of years past. It may well be a little while before we see previous peak values regained in this sector. In contrast, however, the high-price tier showed a much smaller bubble and was far less affected by distressed property sales. We’re seeing significant excess when it comes to previous peak values in 2007, with most San Francisco neighborhoods showing large margins here.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email

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