San Francisco Bay Area Home Prices Up 18% – Case Shiller Home Price Index Positive on San Francisco Real Estate
“If you bought a home in San Francisco in the past year, it might feel like the housing slump is over. Bay area home prices have shot up 18 percent in the past year. But someone next door who bought in 2006 may have suffered a 35 percent loss in value. And if you’re a Las Vegas homeowner, there’s been no good news in four years. The latest report on home prices confirms that real estate is all about timing and location.”
Ah, the elusive timing and location.
First off, no one can time the market perfectly…except those lucky few who did so by accident. You can, however, learn to time the market pretty well if you remember to try NOT to be perfect. Rather, try to stay within the bands of time, i.e. buy when it is a relatively good time to buy a home (for you) and sell real estate when it is a relatively good time to sell (for you).*
As for location, well, that is even trickier. The Case-Shiller Home Price Index tracks metropolitan areas. The San Francisco Metropolitan Area includes Alameda, Contra Costa, Marin, San Mateo, and last but not least, San Francisco County.
Is that location-specific? Does the value of your home in Bernal Heights, Noe Valley or the Inner Mission relate to what is happening with home prices in Fremont?! The Bernal Heights real estate market, the Noe Valley real estate market, the Inner Mission real estate market hardly relate to each other let alone to Contra Costa or Alameda County! Okay, so the home prices in Bernal will relate to those in Noe Valley but do you get my point? Location, location, location is LOCAL, SPECIFIC location, location, location.
Yet, as a local San Francisco Realtor, I am happy to hear that our San Francisco real estate market is kicking *ss. More on that please!
“Some cities, such as San Francisco and Washington, have less area to build out and better job markets, so they have suffered less or in some cases recovered more quickly. (SFHotlist notes that another way to say it is that we’re fashionably late to the nightmare and like to leave early to get up for morning vinyasa flow.) Of all cities, San Francisco has shown the sharpest turnaround. After values plunged 46 percent to their low in March of last year, they have regained 21 percent, the best performance in the S&P/Case-Shiller report.
Doug Duncan, chief economist at mortgage giant Fannie Mae, said housing is healthier in big cities in the Northeast and on the West Coast because they have limited land for construction and better local economies. With desirable San Francisco, “you have an ocean on one side and some mountains on the other side,” he said.”
* If you purchased your home in San Francisco within the past 4-5 years, it may not be the best time to sell (unless it makes sense in your own life, like for a job transfer, change in economic circumstances, change in family situation, you want to take advantages of lower home prices and trade-up to a bigger home or a new area, etc). If you are a first time buyer in San Francisco with a job and some savings, it is probably a great time to buy.