Bay Area Real Estate Cycles since 1984 per the S&P Case-Shiller Home Price Index
The first chart below is a simplified graph based on the Case-Shiller Home Price Index illustrating percentage increases and decreases in prices for Bay Area houses in the higher-price tier. The markets in Marin, San Francisco and San Mateo are generally dominated by high-price-tier home sales.
All the short-term fluctuations up and down have been removed so that the chart only reflects major turning points in the market. This chart is a general overview for 5 Bay Area counties, and there have been significant variations between market trends in different neighborhoods, cities and counties. The Case-Shiller Index does not measure appreciation by changes in median sales price (as in the second chart below), but uses its own special algorithm, which it believes better reflects actual changes in the fair market value of specific properties over time.
It is very important to note that just because market cycles have generally played out in certain ways and on similar timelines over the past 30-odd years does not make it certain they will follow the same pattern in the future.
Median Sales Price Trends by Year
Marin, San Francisco, California & U.S.
2016 Overview Statistics for Marin County Cities & Towns
Mortgage Interest Rate Trends
Interest rate movements are much in the news since the election, and below are 2 charts illustrating both short-term and long-term trends. Interest rates can be volatile and affected by a wide range of economic and political factors. Rate changes are famously difficult to predict, but many analysts believe rates will continue to rise in the next 12 months.
As of December 9th, mortgage rates have jumped relatively dramatically, about 16%, since the election, but from a historical perspective, they remain very low. Needless to say, interest rates play a large role in ongoing housing costs and affordability.
Our post-election report is here: Interest Rates & Housing Affordability
Annual Changes in Home Values
Average Dollar per Square Foot & Median Sales Price
Below are charts that first measure year-over-year changes in average dollar per square foot values and then changes in median sales prices in Marin County. Neither of these common measurements is a perfect indicator of changes in fair market value, because both can be affected by a variety of factors to create fluctuations. It sometimes happens that over the same period of time, one metric of value goes up, while the other goes down, delivering contradictory indications of market appreciation trends. For example, this occurred in Belvedere, Ross and Tiburon over the past year. This is sometimes due to the fact that the average size of the homes sold changed considerably, but other factors can apply as well.
All things being equal, a smaller house will sell for a lower sales price but a higher dollar per square foot value than a larger one. (This has to do with lot values and the costs of kitchens, baths and central systems.) And vice versa: a larger house will sell for a higher sales price but lower dollar per square foot. In the most expensive communities of Marin, swings in average size can be quite large.
This is a useful reminder that these statistics are not perfect, but simply generalizations and approximations of conditions and trends. When a city suddenly sees an unusually large increase or decline in median sales price or average dollar per square foot, it may well have to do with special factors being at play. In real estate, the devil is always in the details.
Average Dollar per Square Foot Values
2012 – 2016
For a little further context, the average dollar per square foot value for houses in San Francisco ranges from $600 to $1500 depending on the neighborhood: Pacific Heights has the highest value.
Median House Price Trends since 2011
Median sales price is that price at which half the sales occurred for more and half for less, and often disguises a huge range of sales prices in the individual underlying sales. It can be and often is affected by other factors besides changes in fair market value, for example, as mentioned above, by significant changes in average house size.
The city of Belvedere is not included in the charts below. It has relatively few sales, and can see an enormous range in sales prices: Its annual median sales price bounces up and down simply due to the specific houses selling in any particular year. The median price in Belvedere, as reported to MLS in 2016 YTD, was $3,370,000, but in 2015, it surged to $3,891,500.
It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis, which we are happy to provide upon request. Please call or email if you have any questions or need assistance in any way.
These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.
© 2016 Paragon Real Estate Group