Northern California Real Estate News - Northern CA and San Francisco Homes for Sale
Quality local news and information from a professional California Real Estate Agent. Local real estate news, information and listings for Northern California authored by San Francisco real estate professional Meredith Martin and edited by RISMedia.The Trouble with the S&P/Case-Shiller index for San Francisco Real Estate
Yesterday I woke to the news plastered all across the media outlets….San Francisco down 13% according to the well respected Case-Shiller index that tracks re-sales of the same single family home over time. I must admit, it gave me quite a start and woke me up in a hurry, because either the number they are quoting is WAY off based on my current experience of sales prices in the city, or I am living on another planet.As it happens I am not living on another planet - fortunately for both myself and my clients, and neither is the number off (although I do believe it’s exceptionally misleading). The index actually tracks the San Francisco BAY AREA – which constitutes a decidedly different number than if you simply tracked the single family homes in the 7×7 square miles of San Francisco County (which has actually seen a modest appreciation in year over year pricing for single family homes). In this instance the Case-Shiller index includes Contra Costa county, Fremont, San Mateo, Alameda, Oakland as well as Marin.A little more research into the report uncovers that different price tiers for that same index, reveal very very different price points. A bit of background to the numbers in the report - which are values created solely for the Case-Shiller report and therefore have no context outside of the index. They manufacture a number, based on the price of a home’s value in year 2000. So if a current index value is 150, that would translate into a 50% appreciation in a home’s value since January 2000. Even if we factor in that the depreciation includes the entire Bay Area rather than San Francisco alone – you start to see some stark discrepancies for different price points. The Case-Shiller publishes a separate report that breaks the sales prices into three price tiers; a low, mid range, and high. The low range are homes that sold under $545,294 and the value for SF Bay area in Jan 2007 was 269.67 which dropped significantly to 192.12 in Jan 2008 – a 77.55 point decline. The high range includes single family homes that sold above $794,192 and in January 2007 the index held a value of 182.06 which then dipped to 175.75 in Jan 2008 – only a 6.31 difference. Don’t get me wrong I’m not out to vilify the report. It is one of the most highly respected reports in real estate, and as such is of value to track broad trends. However, for San Francisco in particular, a 13% reported decline is very misleading, when in fact the median sales price for single family homes have increased slightly in San Francisco county over last year.Meredith Martin is a life-long Bay Area resident, local author, and has been a Real Estate advisor for over 14 years. You can find more information about her at www.StreetsOfM.com
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ABOUT LOCAL AUTHOR
Meredith Martin is a San Francisco California based real estate agent with over a decade's worth of experience selling real estate in the San Francisco Bay Area. Meredith brings a wealth of experience, a sharp eye, a keen gut instinct and impeccable ethics to every real estate transaction she's involved in. Her primary focus is helping her clients prioritize what is most important to them and create a strategy that helps them succeed in achieving their investment goals.
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