Mixed messages about SF Bay Area housing market climate

On the national scene, conflicting indicators and messages are coming out of surveys and studies on the real estate recovery, wherefrom a clear picture of the second half-year 2010 is elusive. While there is decline in foreclosure filings, in almost all the states and metropolitan areas of the country, there is unusual flow of properties for sale in the inventory. Median home prices show a gradual increase, and drop in market values of properties is also continuing. San Francisco is going on the same footsteps of the nation, if recent reports are any indication.

S&P/Case-Shiller home price index is an authentic source, as regards housing price statistics are concerned.  Their latest report says San Francisco, posted an increase of 18.3 percent on a year-over-year analysis – from May 2009 to May 2010 – and leads on the top of 20 metropolitan regions taken for review, in respect of home prices.

San Diego, another popular metropolitan from the same California State, holds the second position in this regard, where an increase of 12.4 percent on the home prices is reported, for the same period as above.

How far this can help studying the trend of market conditions and direction it is heading is a moot point, since the increase in home prices is not consistent. For example, the increase in home price levels was 1.7 percent from April to May, whereas it was 2.2 percent from March to April in San Francisco.

Unquestionably, during the above period there was a spectacular boost in home sales, all over the country, owing to the tax-credit incentives available for home buyers – both first-time buyers and repeat buyers. Yet on studying the increased inventory levels of 27 metropolitan cities, which includes SF Bay Area, for the month of June, experts in the industry expressed surprise over such a phenomenon of more homes being listed for sale in May and June, unheard of during the last 27 years.

Also according to the Index report, out of the 20 cities taken for analysis, only 12 of them showed an increase in home prices on a month-over-month basis from April to May. Overall, the price increase for all these 20 metropolitan cities works out to 4.6 percent year-over-year – from May 2009 to 2010.

Let’s hope the picture will be clearer in the coming months.

Posted by Amitesh Kumar on Jul 30 2010. Filed under Housing. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry