This post first appeared in the April edition of: Cirios Trends: In Search of Real Estate Opportunities.

For 12 months now, the Case Shiller Home Price Index - the most widely watched home price indicator - has been hinting that the housing market has at the very least stopped getting worse. In February’s Cirios Trends, we examined housing’s relationship to the stock market and how last April’s nadir coincided with lows in equities. (For more on home prices and stocks, flip to the charts in the back of this month’s issue for some interesting graphical analysis.)

But back to the data. This month we also received two more signs that the economy, at least on paper, is doing a bit better. First, last week’s employment report showed a meaningful jump in non-farm payrolls for the first time since the recession began. Second, that same Case Shiller Index registered a year-over-year change of nil, the first time prices didn’t slip from the previous year in more than four years.

And looking below at the state of office vacancies, despite hitting the highest level since the 1990s, the rate at which office space is going dark appears to be slowing.

So is that it, are we out of the woods? Not exactly.

Data is easily manipulated and subject to bias, even when its collectors have the best intentions. Let’s look at Case Shiller and dig into just what the data tell us.

Case Shiller looks at paired sales to determine home price changes. In other words, researchers compare sale prices of individual homes in a given month to the last time that house sold. Add in a bit of statistical wizardry and you have a pretty good metric for home price changes over time.

Case Shiller is also considered a value-weighted measure, as it weighs more expensive homes more heavily than cheaper ones. This makes some sense, since otherwise the relatively small number of high priced sales would get lost in the mix.

The implications of this is that an increase in the Case Shiller Home Price Index could either indicate true appreciation, or a shift in data where if more higher priced homes started selling, prices would look like they were rising when in fact, it was something else entirely.

Case in point: Livermore, CA - one of the cities we highlight in this month’s Talking Charts. By measuring price per square foot, which we use as a broad proxy of value, it appears that prices have flat lined for the past 12 months or so. Meanwhile, looking at median prices (a metric commonly used by the National Association of Realtors), prices are up 13.4% in the past 12 months. Quite a difference.

As we edge forward, keep in mind that there is more going on underneath the data than it appears. Always look at trends on as defined a level as possible. Look at cities not countries, zip codes not cities, neighborhoods not cities. Only by drilling deep into the data will it truly help you make better real estate decisions.

For anyone in the market for a single family residence in Noe Valley under $1 million, pickings are slim, at best. Condos, sure, they’re a dime a dozen as the Noe Valley condo market follows rents off the proverbial cliff, but the attractive single family home for less than 7 figures is a rare find indeed. (click to enlarge images)

2324 Castro Street could be that find. Maybe.

At 1,380 square feet with a back yard and two
parking spots, the self-proclaimed cottage certainly
fits squarely into the “condo alternative” category.
The house does seem to try and crowd a lot into a
small space: Kitchen, dining room, reading alcove,
master bedroom with parlor, office/den, laundry,
storage and the aforementioned parking.

But the outdoor space could make up for what may be a cramped interior, and the premium for not having to share the yard with the condo owners upstairs should be significant.

The only question left is whether 2324 Castro is a DEAL OR NO DEAL?

Address: 2324 Castro St., San Francisco, CA 94131
(MLS Listing)
Status: ACTIVE
Bedrooms: 2; Bathrooms: 2
Living Space: 1,380 sq ft
Lot Size: N/A
List Date: 9/11/2009
Original List Price: $849,000
Current List Price: $849,000
MLS no.: 361149

Real Estate Agent Comment: The Quintessential Garden Cottage - Indoor/outdoor living at it’s best! Enchanting home-privacy through a tranquil garden + porch in the front + private manicured back yard w/ apple trees + charming patio on the rear. Home features living room w/garden outlook. Dining room that opens to kitchen w/reading alcove. Kit w/granite counters &skylight. Master bed has separate parlor
w/ensuite bath. Office/den w/french doors out to back yard.
Laundry + storage. Hardwood floors.

DEAL or NO DEAL?
Comment below and tell us what you think!

When looking at a potential house to buy, it’s as important to consider what a broker doesn’t show you as it is to look at what they do show you. 2061 Ashton is a case in point. (click to enlarge images)

First, there are no photos of the front of the home contained in the listing. This is strange, since looking at the Google Street View of the home, it doesn’t look all that bad. Maybe not the most dramatically appealing home, but good enough for a listing photo. We have to wonder why the listing agent omitted this important piece
of information.

Second, in taking a quick peek at the street the most glaring feature is the giant power station just down the street. This is bad, and further compounds the question as to why the listing agent would omit the front of the home, since it’s logical to assume a potential buyer would check this out on their own.

The home itself seems fine, a smaller, reasonably updated house close to Alameda de las Pulgas in Menlo Park and in a great school district. But for under $1 million, this could be a good starter home … if of
course we can figure out whether 2061 Ashton is a
DEAL OR NO DEAL?

Address: 2061 Ashton Ave., Menlo Park, CA 94025
(MLS Listing)
Status: ACTIVE
Bedrooms: 3; Bathrooms: 2
Living Space: 1,580 sq ft
Lot Size: 6,000
List Date: 6/18/2009
Original List Price: $999,000
Current List Price: $999,000
MLS no.: 80939201

Real Estate Agent Comment: WEST MENLO TOP REMODEL: RE-DO COMPLETED IN 2002 WITH MANY COMPLIMENTS THAT STRIKE THE EYE: STAR STUNNING CONTEMPORARY IN BEST COUNTY ALAMEDA AREA EXTRA AMPLE FRONT + REAR YARD WITH BEAUTIFUL LANDSCAPING; GREAT ROOM IS HEART OF HOME WITH WELL APPOINTED KITCHEN.

DEAL or NO DEAL?
Comment below and tell us what you think!

In a market where updated, well-priced, move-in ready homes are few and far between, the opportunity to buy fixer uppers is considerable. Current mortgage outlets, namely the US government, are reticent to give out loans on homes that need some work, which creates an opportunity for all-cash investors to buy homes that need some upgrades, do the work and resell them to homeowners looking for a turnkey home. (click to enlarge images)

731 Stannage Ave in Albany appears to be just this sort
of opportunity. Located in Albany, a quiet suburb just
north of Berkeley with extremely good public schools,
this home is in need of a face lift. Just look at those carpets. Structurally, it appears to be sound, so repairs would be kept to cosmetic items: New counters, carpets/flooring, paint, bathroom and some landscaping.

With some TLC, this home could very very attractive.

But at just under $500,000, this is not an investment for the faint at heart. Is the risk worth the reward? Is 731 Stannage a DEAL OR NO DEAL?

Address: 731 Stannage Ave., Albany, CA 94706
(MLS Listing)
Status: ACTIVE
Bedrooms: 3; Bathrooms: 1
Living Space: 1,302 sq ft
Lot Size: 3,800
List Date: 8/13/2009
Original List Price: $499,000
Current List Price: $499,000
MLS no.:40424505

Real Estate Agent Comment: STYLISH OLDER HOME IN NEED OF SOME WORK, GREAT ALBANY LOCATION, SPACIOUS ROOMS, FIREPLACE IN
LIVING ROOM, FORMAL DINING, BASEMENT, TANDEM GARAGE, GOOD SIZED YARD TOO, TAKE A LOOK.

DEAL or NO DEAL?
Comment below and tell us what you think!

Every once in a while, we run across a house where the list price just doesn’t make sense. When 5692 Cabot Dr. in Montclair popped up on our radar screen, it screamed DEAL without question. So, naturally, we immediately tried to figure out what was wrong with the house. (click images to enlarge)

Good location? Check.
Walking distance to downtown Montclair, an upscale enclave in the Oakland Hills.

Nice interior? Check.
Tasteful updates, high ceilings.

Yard? Check.
Many homes in the Oakland hills are wedged into cliffs and don’t have yards. This one has one– albeit it a small one — but plenty of room for a table and BBQ on the patio, plus some flat ground for a garden.

Quirky? A bit.
The downstairs bedroom has no bathroom and is sort of
long and skinny, but certainly not a deal killer.

We scratched our heads — what gives? This place should sell in a nanosecond above list.

Then we found it: No parking.

Not only does the home have no a driveway or garage, the part of the street immediately in front of it is a No Parking zone! There is street parking nearby, but this should be viewed as a definite negative. That being said, this home still offers a relatively inexpensive to move into a popular neighborhood with excellent public schools.

So, does all that add up to a DEAL OR NO DEAL?

Address: 5692 Cabot St., Oakland, CA 94611 (MLS Listing)
Status: ACTIVE
Bedrooms: 3; Bathrooms: 2
Living Space: 1,687 sq ft
Lot Size: 7,242
List Date: 7/30/2009
Original List Price: $649,000
Current List Price: $649,000
MLS no.:40422306

Real Estate Agent Comment: Heart of Montclair, move-in ready w/a Walk Score of 80. HWF’s, FP, deck in front, patio/yard in back. Upgraded kit & baths. Plus room. New paint inside and out. A must see..

DEAL or NO DEAL?
Comment below and tell us what you think!

Ask a sample of Bay Area residents to point to San Ramon on a map, and you’ll likely get as many people looking in Marin for San Rafael as you get people who can actually locate it in the East Bay just north of Dublin and south of Danville.

New developments sprouted up all over San Ramon during the housing boom, and prices screamed upwards. Values have since fallen back to earth, and attractive homes can be financed with low cost government loans. We don’t expect prices to stabilize
in the near term, as mid-markets are being pinched from trouble in the high-end, but we do believe that the steepest of price declines in San Ramon are now behind us.

This week’s Deal or No Deal is located in a cul-de-sac, which is always desirable, and has a nicely landscaped yard, updates throughout and a decent amount of square footage. The only question, of course,
is whether it’s a DEAL OR NO DEAL?

Address: 470 San Diego Pl., San Ramon, CA 94583 (MLS Listing)
Status: ACTIVE
Bedrooms: 3; Bathrooms: 2
Living Space: 1,665 sq ft
Lot Size: 8,000
List Date: 7/27/2009
Original List Price: $649,000
Current List Price: $649,000
MLS no.:40421615

Real Estate Agent Comment: This beautifully remodeled home is located at the end of a quiet cul-de-sac in the desirable neighborhood of Cape Cod-style homes near Montevideo Road in San Ramon. The open floor plan of ~1700 square feet has 3 bedrooms, 2 full baths, 2-car garage, family room with fireplace, and formal dining.

DEAL or NO DEAL?
Comment below and tell us what you think!