Bankrate “talked to experts, studied public and private databases, analyzed market trends and examined the analyses of many others” in order to arrive at their list of ten “bubble blowers” (appreciation should continue to grow), “bubble sitters” (appreciation may have peaked), and “bubble busters” (values expected to decline).
San Francisco? Deemed to be one of the ten bubble sitters:
“With a median home price of nearly $720,000 at the end of 2005, according to the NAR, San Francisco remains one of the country’s most expensive cities to live in, outpacing even Honolulu and New York City. Housing prices are unlikely to decline because of short supply — surrounded by hills and its famed bay — there’s just nowhere else to build anything less expensive in the city. But realistically, there aren’t that many people who can afford to buy at those prices, which should keep prices from going much higher.”
Our big question: what’s the impact on buyer behavior should the market flatten out? At a minimum it will be much hard to justify a new investment, or to rationalize an interest only or short-term mortgage product (which will only compound the affordability problem).
∙ Going up, down and sideways: Top 30 cities to watch [Yahoo!]
For a place with “nowhere to build,” there’s sure a lot of construction going on.
The city’s losing population… perhaps the people who are sure prices here can’t decline have forgotten the early 1990s.