HOUSING PRICES - CALIFORNIA

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SAN FRANCISCO MSA

HPI Price Walk - All Tiers:

2000 to Peak: Home prices more than doubled - up 118%, or 12.4% annualized.

Peak to Trough: Decline nearly equal to prior price gains - down 46%, or (21.6)% annualized.

Trough to Current: Home prices surging again - recovering all price losses and more; up 121%, or 10.3% annualized..

Current from Peak: Home prices 19% above peak.

HPI Price Walk - Low Tier:

2000 to Peak: Home prices nearly tripled - up 176%, or 15.5% annualized.

Peak to Trough: Decline nearly equal to prior price gains - down 62%, or (34.7)% annualized.

Trough to Current: Home prices surging again - recovering all price losses and more; up 173%, or 10.3% annualized..

Current from Peak: Home prices 4% above peak.

Trends in Yearly Home Prices:  Significant, but variable, rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by continued strong price gains.

Trends in Yearly Home Prices: Significant, but variable, rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by continued strong price gains.

HPI Tiers:   Key difference between this price cycle and the prior cycle is that all price tiers show significant increases in the current cycle. In prior cycle, the Low Tier showed out sized price acceleration and rise - and hit bottom at significantly lower level than the Mid and High Tiers. Both mid-tier and upper-tier housing price segments are well above pre-recession peaks. And the lower tier has finally exceeded prior peak.

HPI Tiers:

Key difference between this price cycle and the prior cycle is that all price tiers show significant increases in the current cycle. In prior cycle, the Low Tier showed out sized price acceleration and rise - and hit bottom at significantly lower level than the Mid and High Tiers. Both mid-tier and upper-tier housing price segments are well above pre-recession peaks. And the lower tier has finally exceeded prior peak.

Home Affordability: Home affordability is significantly more costly than U.S. averages.

Home "P/E" ratio = 11.3X. Median home purchase is +11X median family income compared to 3.8X for U.S.; takes +11 years of a San Francisco area family's income to earn the sale price of the median priced home compared to 3.7 years on average across the U.S.

HOI = 6.4%. Only ~6% of families can afford median priced home (NAHB HOI).

HPI vs. CPI:   Housing prices have risen above pre-recession peak. Using CPI as a measure of inflation, housing prices fell below CPI trendline. Following sustained trough, housing prices were rising strongly.

HPI vs. CPI:

Housing prices have risen above pre-recession peak. Using CPI as a measure of inflation, housing prices fell below CPI trendline. Following sustained trough, housing prices were rising strongly.


LOS ANGELES MSA

HPI Price Walk - All Tiers:

2000 to Peak: Home prices up 2.75X, or 174%, or 15.2% annualized.

Peak to Trough: Decline of 42%, or (20.2)% annualized.

Trough to Current: Home prices surging again - nearly recovering price losses and up 76%, or 7.9% annualized.

Current from Peak: Home prices 2% above peak.

HPI Price Walk - Low Tier:

2000 to Peak: Home prices up 3.4X, or 240%, or 18.0% annualized.

Peak to Trough: Decline of 56%, or (31.8)% annualized.

Trough to Current: Home prices surging again - recovering price losses and up 124%, or 8.4% annualized.

Current from Peak: Home prices remain (2)% below peak.

Trends in Yearly Home Prices:  Significant rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by moderate price gains.

Trends in Yearly Home Prices: Significant rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by moderate price gains.

HPI Tiers:   In prior cycle, Low Tier showed substantially greater price increases than Mid and High Tiers and all hit bottom at same levels. Today all price tiers show solid increases. Upper-tier housing price segment is above pre-recession peak. And the mid tier is approaching that peak. Lower tier remains below peak but recently exhibiting fastest growth of the three HPI tiers.

HPI Tiers:

In prior cycle, Low Tier showed substantially greater price increases than Mid and High Tiers and all hit bottom at same levels. Today all price tiers show solid increases. Upper-tier housing price segment is above pre-recession peak. And the mid tier is approaching that peak. Lower tier remains below peak but recently exhibiting fastest growth of the three HPI tiers.

Home Affordability: Home affordability is significantly more costly than U.S. averages.

Home "P/E" ratio = 8.9X. Median home purchase is ~9X median family income compared to 3.7X for U.S.

HOI = 7.6%. Only +7% of families can afford median priced home (NAHB HOI).

HPI vs. CPI:   Housing prices have risen to near pre-recession peak. Following sustained trough, housing prices are rising steadily. Note that housing prices did not fall to CPI trendline.

HPI vs. CPI:

Housing prices have risen to near pre-recession peak. Following sustained trough, housing prices are rising steadily. Note that housing prices did not fall to CPI trendline.


SAN DIEGO MSA

HPI Price Walk - All Tiers:

2000 to Peak: Home prices up 2.5X, or 150%, or 15.8% annualized.

Peak to Trough: Decline of 42%, or (16.0)% annualized.

Trough to Current: Home prices surging again - nearly recovering price losses and up 76%, or 7.6% annualized.

Current from Peak: Home prices have surpassed peak by 1%.

HPI Price Walk - Low Tier:

2000 to Peak: Home prices up 3X, or 197%, or 17.1% annualized.

Peak to Trough: Decline of 53%, or (25.3)% annualized.

Trough to Current: Home prices surging again - recovering price losses and up 116%, or 7.9% annualized.

Current from Peak: Home prices have surpassed peak by 3%.

Trends in Yearly Home Prices:  Significant rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by continued strong price gains.

Trends in Yearly Home Prices: Significant rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by continued strong price gains.

HPI Tiers:   In prior cycle, Low Tier showed substantially greater price increases than Mid and High Tiers; yet all price tiers bottomed out at the same levels. In the current cycle, all price tiers show significant increases. The Low Price Tier (lowest one-third of home sale prices) is exhibiting the most rapid increase.

HPI Tiers:

In prior cycle, Low Tier showed substantially greater price increases than Mid and High Tiers; yet all price tiers bottomed out at the same levels. In the current cycle, all price tiers show significant increases. The Low Price Tier (lowest one-third of home sale prices) is exhibiting the most rapid increase.

Home Affordability: Home affordability is significantly more costly than U.S. averages.

Home "P/E" ratio = 7.0X. Median home purchase is 7X median family income compared to 3.7X for U.S.

HOI = 14.1%. Only ~14% of families can afford median priced home (NAHB HOI).

HPI vs. CPI:   Housing prices have risen and now exceed pre-recession peak. Following sustained trough, housing prices are rising strongly.

HPI vs. CPI:

Housing prices have risen and now exceed pre-recession peak. Following sustained trough, housing prices are rising strongly.