The DJIA crossed 10,000 last week, and seems to be oscillating in that range. (This second at 10,015, thanks to my iphone).  National Public Radio quotes the National Association of Realtors, reporting that home sales in September were up, but national median sale prices are down 8.5% from last year.  Interest rates are incredibly low, and for many first time buyers, the tax credit (up to $8,000, depending upon income) will expire at the end of November.

What's up?  Is the housing market recovering? I get asked these questions by my buyers and other prospective buyers.  When I dig a little, to learn the question behind the question, the real question seems to be "If I buy now, will prices go down?".

So what's going on in San Francisco? That depends upon where you live.  The attached chart shows the  Percentage Increase/Decrease by SFAR District by SF real estate district. In District 5, located in the central part of SF and includes neighborhoods like Noe Valley, Cole Valley and the Castro, the median price of all homes, condos, TICs and 2 to 4 unit buildings rose between 9/07 and 9/08 by 2.4%.  In the last year, the median price has decreased by 12%.  In District 7, which includes Pacific Heights, Presidio Heights and the Marina, the median price rose 16.5% between 07 and 08 and declined 14.3% in the last year.  

In Districts 3 and 4, the were decreases between 9/07 and 9/08 of 23% and 22% respectively.  Between September 08 and 09, these neighborhoods in the south western part of San Francisco show increases in median prices in the 10% range.  

Real estate is really local!  It appears that the southern neighborhoods were impacted by the recession earlier than those in more central neighborhoods.  It also appears that the low prices in these neighborhoods, coupled with low interest rates and other incentives has fueled the bidding wars, which indicate a healthy level of demand.  Hopefully the neighborhoods that have lagged in declines will see turnarounds quickly.

At my open house this Sunday in Duboce Triangle (in District 5), I had 91 sets of visitors (about 150 people) through my 2 hour open house.  A few parties are interested in purchasing the property.  It feels like the market is getting healthier.

But back to the primary question: If I buy now will prices go down?  The real answer is of course, maybe.  Like all markets, in real estate, prices go up and prices go down.  A real estate purchase should be long term, and if you are buying a residence, purchase a place that you can envision living in or holding on to for a while.  We are at a unique time, with lower prices, really terrific interest rates.  Even if prices go down, if you hold long enough, you will live in a great place, low financing costs, a lower tax basis and a home in one of the best cities in the world.