December Case-Shiller reflects plateauing home values … for now

Recently the December 2014 Case-Shiller Index was released, showing a general flattening of home values from the end of the 2014 spring market through year’s-end. We seem to be looking at another feverish spring market this year, which in turn typically translates to another burst of home-price appreciation.

The accompanying chart reflects the Bay Area house markets’ high-price tier, which is generally seen in most of the San Francisco, Marin and San Mateo markets. A few highlights from the notes on the chart:

· Spring has been the season of greatest appreciation for the last three years

· Bay Area homes in the upper third of the price range appreciated 9.3 percent in the past 12 months

· Prices have appreciated about 43 percent since the market recovery began in early 2012.

Meanwhile, home prices, as shown in the data released in the report, are on an uptick nationwide. Both the 10-City and 20-City Composites reflected year-over-year increases in December as compared to November, with the 20-City Composite jumping 4.5 percent year-over-year as compared to a 4.3 percent increase in November.

San Francisco saw the fastest year-over-year gain with its 9.3 percent rise, followed by Miami at 8.4 percent. Twelve cities, including Cleveland, Denver and Seattle, also saw faster price increases in December than in November.

As for declines, Las Vegas led the pack with 6.9 percent in increases, down from 7.7 percent annually.

“The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence,” S&P Dow Jones Indices managing director and index committee chairman David Blitzer said in a statement.

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