Here comes the Case-Shiller report for May 2014. This report shows another small bump in home prices from April to May for the five-county San Francisco Metro Statistical Area, with the aggregate or total index now up about 55 percent since recovery began in earnest in 2012. Those five counties that are covered are San Francisco, Marin, San Mateo, Alameda and Contra Costa.
Keep in mind, though, that Case-Shiller also breaks out home prices changes by price tier – that is, low, middle and high – and each tier has seen very different trend lines since 2000. We’re finding the low price tier homes mostly Alameda and Contra Costa counties, though other Bay Area counties not in the San Francisco metro area such as Solano, Sonoma and Napa are also in this category. Much smaller bubbles and crashes were seen in the middle and high-price tiers, which dominate in San Francisco, Marin and San Mateo counties. This is dramatically illustrated in the graph which accompanies this story.
Something to remember: in all the Case-Shiller indices, the numbers refer to a January 2000 home value of 100. That means that a reading of 195 means a value of 95 percent above that of January 2000.
While all tiers have experienced major recoveries since the beginning of 2012, only the high-price tier has exceeded the previous peak values of 2006 and 2007. However, the homes in the low-tier price bubble have home prices far below the previous peak values and it’s unlikely that they will surpass that peak any time soon.
That said, all the price tiers are showing very similar overall appreciation rates since 2000: a range from 93 to 97 percent over the past fourteen and a half years. This suggests an equilibrium is being achieved across the general market.
Our full report can be found here.
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