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As a current renter and a hopeful future buyer, it would be nice to see some monetary declines and not just price stagnation.

1929 - 1934

Prices are already coming down - just depends on what you're looking for. I admit I haven't spotted any notable declines in 94123. But the outer areas are getting hit. Bayview, obviously, but also nicer outer areas like Parkside, Merced Heights, etc. Patience.

I posted earlier that I believe we are looking at 91-97 again for the next 5 years.

The big question is have we reach the plateau yet, which I expect we won't have data on until Mar'08 given the 3 month lag on Case-Shiller.

Here are some examples.

Parkside house listed for $695K, last sold in April of '06 for $750K, so down $55K and still on the market.

http://sfbay.craigslist.org/sfc/rfs/432256522.html

Here's a short sale in Silver Terrace. Sold in 2005 for $758K, now listed for $650K, over $150K off of peak and still not sold.

http://sfbay.craigslist.org/sfc/rfs/432792951.html

There are lots of others out there. As Observer points out, real estate moves in long cycles, and this one just started.

Amen. Everyone wants to see a short blip or a plateau...but we're in for a longer hangover I fear. That's the way its always worked. I'm fully invested in commercial real estate and generally bullish...but we're due for a correction in housing. Moulton is nothing special IMO and could even be called an overimprovement...such a property may be tough to sell in this market.

Observer, the 91-97 plateau came after the 89-91 slide. Given that some neighborhoods are still moving up, and the spirited discussion here on socketsite, my conclusion is the SF market is still in transition. In other words, the slide hasn't even begun, so we may be 3 years away from the plateau. And in my opinion, 3 years is optimistic given the worldwide nature of the asset bubble. So quit your cheerleading :)

I can't find the link right now, but there exists a study of the Bay Area price and the cycles averaged out to 18 years. There was a wide variance, from as short as 7 years to well over 20. That said, we are almost exactly 18 years from the last start of the slide.

Note, also, that prices slid down about 5 or 7 percent a year, not exactly a crash. I would not hold my breath waiting for a sign that prices have reached their corrected plateau and now is the time to buy. I tend to agree with the realtors on how this will initially play out. It will just be worse than they will publicly admit. The wildcard this cycle are the number of units being added south of market (Vertical Stockton?)

There is a benefit of a good 3-5 year slide in prices. It will convince everyone that real estate is a horrible investment. The plateau - I prefer the metaphor of "anchor dragging along the bottom" - may be the mother of all buyers markets.

When no one wants to touch real estate is when I dust off my checkbook.

Will no one speak up for Silver Terrace?

Emmett Brown, no cheerleading intended I share my perspective on the relator industrial complex with that of Freakonomics.

But I believe that market has turned with prices in South Beach revisting prices last seen in 2005, but the fundamentals of high tech jobs and quality building means the shake out and search for plateau will come down to location, location, location.

For me the voice of reason goes to 'gh' the unansewered question is when and where the fog of hangover will lift?

Hi Observer, I was joking about the cheerleading! Your prognosis is reasonable and reflects an appreciation for historical precedent. I was only pointing out that history was 'worse' than merely 91-97 plateau, esp. when you look at the history from 89 (previous peak) through 97.

And that was just a 'normal' correction. There are some frightening storm clouds on the horizon this cycle.

Thanks Emmett, the stromclouds will be interesting to watch as we all search for a plateau, looking forward to watching them with all the folks on Socketsite.