Case-Shiller report issued for December
For the last time this year, the Case-Shiller Index for the San Francisco Metro Area has been issued. Paragon has written up its own take on the matter. Remember, the index is published two months after the fact and reflects a three-month rolling average, so this time around it reflects the index for October and is not completely current.
The index covers the housing markets of five Bay Area counties, divided into three price tiers, each constituting a third of unit sales. The majority of San Francisco’s housing stock lies in the high-price tier, so that is where we at Paragon focus most of our attention.
The first two charts that accompany this article are illustrative of the price recovery of the Bay Area’s high-price-tier market over the past year as well as since the beginning of 2012, when the market recovery really began in earnest. Home prices jumped in the spring and then plateaued in the summer and autumn months in both 2012 and 2013. Spring 2013 saw a particularly dramatic surge in spring, which reflects a frenzied market of huge buyer demand as well as historically low interest rates, extremely low inventory and increasing consumer confidence.
The current Case-Shiller report begins to reflect the autumn selling season, which begins just after Labor Day. Typically, we see the market heat up in autumn. Following a feverish spring market, the high-priced tier and then flattened and ticked down a little. Meanwhile, more affordable home segments continued to tick up. That’s not unusual.
According to the index, all Bay Area home price segments went up in October by about 1 percent, plus or minus depending on segment. Keep in mind that small monthly fluctuations aren’t what’s important – it’s the long term that counts.
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