Slow-Down in Number of Homes Sold, While Prices in SF Continue to Rise

It seems like almost every day we are bombarded by reports of the crisis in the housing market, the impending recession, and other forms of doom and gloom.  I often wonder how much of this we create by putting our attention on how bad things are when they really aren't. 

This morning's front page article from the San Francisco Chronicle is entitled, How Low Will We Go?, starting with an openning sentence "The Bay Area housing crisis is worsening on all accounts, as the lack of credit and growing uncertainty extinguished hope for a quick turnaround in the new year."  What you will not see on the internet is a chart that is included on the front page with information from DataQuick information services that shows an increase in the prices of homes in San Francisco and Marin counties of over 5%.  It's interesting, and I guess I would say that I don't think that an increase in housing prices in these two counties represents a worsening on all accounts--unless of course, you are a Buyer and have just lost the home of your dreams in a bidding war.

So what's going on?  It is true that prices, on average in San Francisco have dropped in some of the southern, outlying neighborhoods in the city.  It is also true that the number homes that are sold in the city has gone down.  And, it is important to know that in many neighborhoods prices in most classes of homes continues to rise.  For some buyers, there are very few homes that meet their criteria for them to see.  Rates are fairly low, and as soon as HUD finalizes the loan limits in the stimulous bill, more buyers will be able to afford more by avoiding the high rates on jumbo loans.

I think that repeated articles like this, where the whole Bay Area is lumped into one category contribute to economic uncertainty that they claim is happening.  The truth is that the Bay Area has a thriving economy, fueled by incredible creativity in technology, internet, bio-tech and other sectors.  San Francisco is an amazing place to live, and I think will continue to thrive--especially if we focus our attention on creating growing companies, reducing crime, re-building our infrastructure, shifting our use of resources and footprint on the planet, and other things that will lead to our long term quality of life.