Thursday, November 03, 2005

Housing Price Index for Bay Area

The following graphic was sent in by a reader. The data is from the San Francisco-San Mateo-Redwood City, CA Metropolitan Division, Marin, San Francisco, and San Mateo counties. He has other such graphics which can be found here.

According to the author's write-up:
  • The HPI tracks the resale prices of the same homes. In other words, if the HPI rises by 5 percent in a year, it means that, on average, every individual home has increased in price by 5 percent compared with the price it sold for last year.
  • The trend line (green) is established from the minima circa 1986 and 1997.
  • See the details for each Metro Statistical Area (MSA) here.
  • OFHEO Website

8 Comments:

Blogger marin_explorer said...

That's a very informative graph. It's interesting to me that the current deviation from trend figure is very close to my crude estimate arrived by analysis of house appreciation in Marin '99-05. Could we this time see price reflexivity that pushes the market below the trend? After looking at data of LA's RE bust in the early 90's, I think that's a real possibility.

Nov 3, 2005, 8:15:00 PM  
Blogger Marinite said...

It's interesting to me how the price deviation took off again around 2003. That's when it was clear to me we were in another speculative bubble. It's nice to have the confirmation.

Nov 3, 2005, 8:38:00 PM  
Blogger sf jack said...

Just as Marinite said, it's interesting that what looked like a "natural peak" in 2001 (analogous to earlier peak in '90 or so) went "flat" for a while in 2002/03 before blasting up again in 2003/04/1H 05.

I'm thinking the activity after what I'm calling the "natural peak" probably had nothing to do with fundamentals - and everything to do with "easy money", as rates went to historical lows then. It took a while, but once there, those rates boosted the market again.

Nov 4, 2005, 11:05:00 AM  
Blogger marin_explorer said...

I'm thinking the activity after what I'm calling the "natural peak" probably had nothing to do with fundamentals - and everything to do with "easy money",

I suspect speculative activity picked up by '98, but as you noted, the bubble really kicked in over Spring '04. What was crazy became totally insane; the mania was almost palpable. Mortgage trends appear to be in-phase with the later stage of the bubble.

Nov 4, 2005, 11:18:00 AM  
Blogger fredtobik said...

Did you move your money to cd's, in preparation to capitalize? or Bonds? I am weighted in stocks right now, but bonds might be a good investment right now.

Nov 4, 2005, 4:31:00 PM  
Blogger sf jack said...

fred -

Yeah, you go right ahead and be a fixed income buyer.

I've heard you would have done real well with some 10yr Treasuries lately.

Nov 4, 2005, 8:40:00 PM  
Anonymous Anonymous said...

Yes, I agree the "natural peak" occurred around 2000-2001; this would have made it a normal duration for the upward part of the cycle relative to previous cycles. Then 9-11 happened & the Fed took the bottom out of interest rates...you were practically borrowing below rate of inflation. For a while (2001-2003), there was still plenty of economic/market uncertainty, I think due to direct/indirect effects off 9-11 & the 2 mid-east wars. Then, 2003, poof! Speculative Frenzy.

Nov 6, 2005, 12:33:00 AM  
Blogger sf jack said...

anonymous said:

"Then, 2003, poof! Speculative Frenzy."

************

Exactly.

And Bay Area residents? Speculative? Frenzied?

Nah, never. Never done that.

(Right)

Nov 6, 2005, 7:07:00 PM  

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