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Greg,

I'm also trying to figure out this market. I'm looking at history & trends, and it looks like we will have another 6-12 good months before it will become a buyer's market again. So I believe 2014 will be a buyer's market. After that, we will gradually ascending for several years. I might be a seller in 2020.

E-man says

So I believe 2014 will be a buyer's market. After that, we will gradually ascending for several years.

Interesting prediction, but am unsure of the reasons supporting it? The SF area is full of micro-climates, both in terms of weather and real estate. Pacific Heights vs Bayview and Hunter's Point, SF vs South City, all seem to move mostly independently. I've been trying to predict it for years, haven't found the key to it yet.

I was looking to buy my first house in the first half of the year on the Peninsula, and this chart seems very conservative compared to what I experienced - multiple bids and houses selling for way over asking. I would have expected a sharper upturn.

wave9x says

I was looking to buy my first house in the first half of the year on the Peninsula, and this chart seems very conservative compared to what I experienced - multiple bids and houses selling for way over asking. I would have expected a sharper upturn.

Wave,

YTD, I've seen home prices shot up between 10%-30% in Santa Clara County. It depends on the location and the price range. As a buyer, I'm stunned at the price upswing this year. It feels just like 2005. Kind of like buy now or be priced out forever.

E-man says

It feels just like 2005. Kind of like buy now or be priced out forever.

It's definitely got that feeling again down here in SoCal. So much so that I've completely stopped looking at RE. This has "massive speculator crash" written all over it. The economy is much worse in 2012 than 2005-2006.

E-man says

YTD, I've seen home prices shot up between 10%-30% in Santa Clara County.

The Case-Shiller San Francisco chart doesn't include Santa Clara County. It's San Mateo, SF, Alameda, not sure what else. But not Santa Clara.

I think you are right though, prices have come up in SCC.

get ready for the inevitable "prices are crashing, new construction is $60/ft, a brand new 2000 sq ft house is available for $120k anywhere in the USA". With no citation as to where such a thing actually exists.

And rents are going through the roof, too, reminding me of 2008/2009. It is just so hard to live there - I can't figure why people choose to stay.

With the price of land in the Bay Area there's no way any new construction will be close to 120K. Heck, each tiny individual 3,000 sq ft lot probably costs more than that.

SiO2 says

I think you are right though, prices have come up in SCC.

get ready for the inevitable "prices are crashing, new construction is $60/ft, a brand new 2000 sq ft house is available for $120k anywhere in the USA". With no citation as to where such a thing actually exists.

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The Professor says

How can wages support price and rent increases?

Median household income

United States 2006: $52,347 2010: $50,046 (down 4.4%)

California 2006: $61,251 2010: $57,708 (down 6%)

San Francisco 2006: $70,664 2010: $71,745 (up 1.5%)

Marin County 2006: $88,793 2010: $83,867 (down 5.5%)

Alameda County 2006: $69,633 2010: $67,169 (down 3.5%)

Contra Costa County 2006: $80,191 2010: $83,867 (up 4.6%)

San Mateo County 2006: $83,984 2010: $82,745 (down 1.5%)

Source: U.S. Census Bureau

Read more: http://www.sfgate.com/bayarea/article/Bay-Area-income-beats-state-U-S-census-shows-2309174.php#ixzz2AzbFqIsK

Best and the only counter argument will be put up is, rates are super low and hence the high price is justified regardless of underlying economy/jobs/wage issue - meaning to say current home prices are still bubble prices. At the peak of the bubble it was the EZ loans that fueled the market,now it is the low rates that fuels it. Once the economy turns into much better shape the investment frenzy in housing will start waning down as stock market investment would look better,then another downward leg in housing prices regardless of what the rates would be.

LiarWatch says

wave9x says

I was looking to buy my first house in the first half of the year on the Peninsula, and this chart seems very conservative compared to what I experienced - multiple bids and houses selling for way over asking. I would have expected a sharper upturn.

Sit tight. What goes inflated always deflates.

maybe gas will deflate back to $1/gallon as well?