Archive for December, 2011

Case-Shiller’s October 2011 Report; aka the Devil’s in the Details

The new Case-Shiller Index just released for October gave a great headline: ‘”Prices declined in 19 out of 20 US Metro Areas.”   While it’s accurate to say that the aggregate Index for the San Francisco Metro Statistical Area (five seemingly random Bay Area counties) did decline, albeit very slightly (by a half of one percent); the High Tier Price Index for the SF Metro Area, which is the Index that best applies to the city of San Francisco itself actually ticked up a little in October.   Some day I would love to learn how or why those five counties specifically were selected to represent San Francisco – you too can find which counties it counts as ‘San Francisco’ buried on one of the pages of the report – took me a while, it was a game, like finding Where’s Waldo.

The Case-Shiller High Tier Index applies to house sales of about $600,000 and above. In the 8 northern and central districts of the city, the median house sales price for non-distress houses is well over $800,000. If there was an “Upper High Tier Index” for SF alone, which sadly there is not, I suspect we would see an even larger uptick in prices. It’s been very consistent in the city, Bay Area, state and country that lower price homes have been affected much more negatively than higher price homes.

For the record, tiny monthly fluctuations must be considered within any reasonable margin of error and are essentially meaningless. What is important are the more consistent, longer-term trends.  The beauty of all this data is you get to decide what headlines to believe, and more importantly what to discount; but give yourself a moment to read the fine print first…



Trulia’s Crystal Ball for 2012 is out…

Although I agree with the author, no one really has a crystal ball, certain trends do start to emerge over time, and I’m a supporter of his very clearly written views.

As has been very well published most places in the press, San Francisco rents are through the moon, particularly in South of Market where Web 2.0 aka Social Networking is at it’s most fiercely creative.

As we wrap up 2011, Trulia’s Chief Economist looks ahead at what’s in store for the battered housing market and which cities have a big reason to celebrate the New Year.

By Jed Kolko (@JedKolko), Trulia’s Chief Economist

My crystal ball is never as crystal-clear as I’d like, but I do think that we can expect a gradual economic recovery to move the housing market a few steps back toward normal in 2012. Even so, we still have a long ways to go. As we exit 2011, prices still not have rebounded after their huge declines, inventories are still well above normal, and the foreclosure rate is still far higher than before the bubble. Even the best possible 2012 won’t get us halfway back toward normal.

Before getting into the predictions, let me be upfront about what I’m assuming. After 14 months of job gains, I expect the economy to continue its slow but determined recovery. I don’t do my own macroeconomic forecasts, but every single one of the fifty-ish economic forecasters surveyed by the Wall Street Journal expects the economy to grow throughout 2012, and that makes sense to me. Of course, any unexpected severe political or financial crisis could tip us back into recession, and then all bets are off. Here’s to hoping that doesn’t happen.

My five predictions for housing in 2012: Read More

Trulia’s Real Estate Crystal Ball for 2012 []