The big news on the real estate front this week was the release of the SP/Case-Shiller index, which tracks home values in 20 major metropolitan cities across the country. Disappointing news is closing out the year as national home prices continued their drop, but more than expected.
The overall index showed a 3.4% drop from October 2010 to October 2011. In San Francisco, the news was worse. Home values overall here went down by 4.7% during the same period. For the 1 month period from September to October, San Francisco saw values fall by 0.7%. Nationally, the decrease was 0.6%. But, as we all know, real estate is all about location, location, location. In locales where the median price is higher, homes aren’t getting hammered as hard.
While the overall figures looks dismal, our friends at SocketSite dug further into the Bay Area numbers and uncovered some variations within the market. Higher priced homes are faring better in this real estate downturn. Homes in the $600,000+ range showed a 1 month increase and the yearly figure, which was still down, is not nearly as bad as lower priced homes.
The bottom third (under $319,767 at the time of acquisition) fell 0.9% from September to October (down 9.1% YOY); the middle third was unchanged from September to October (down 8.1% YOY); and the top third (over $599,697 at the time of acquisition) rose 0.3% from September to October, down 1.6% year-over-year (versus down 3.1% in September).
The recent stats follow the overall trend of single family homes in San Francisco. The homes in the top third have dropped 25% from their peak values while the bottom third and middle third of the market has seen price decreases of 60% and 41%. And as Anna Marie Hibble wrote, the rise of Bay Area IPOs may just continue to put more zing in real estate, especially in the higher end of the market.