Selling in 2000 was smart if your home was in Santa Clara County. Some prices declined 25% or more in the wake of the dot.com crash. Since then however, prices have probably increased 50-70% in the bay area. Not nearly as rapid an increase as in San Diego, since prices were already quite high here.

The peak here was probably reached mid-2005. In especially frothy areas without good schools and good commutes, I’d estimate prices have dropped around 100K on an average 800-1M home. Yes, 800K is an “average” home.

What’s different about the Bay Area? First off, it’s a hell of a lot nicer than San Diego. [Sorry Piggingtons, but it’s true]. Second, average wages are quite a bit higher here, so those prices are going to stay higher longer. Third, simple geography limits available land, so there is not a hell of a lot of new construction out there.

Much of the housing stock here is old and decrepit. In my town, teardowns on a 5,000 sq ft lot might sell for 850K if there is a view and no highway noise. A remodeled 1950s tract home of 1300 sq ft will sell for 775-850K. The few larger homes of 2000 or more sq feet will command their own prices, since there are so few of them. S

In summary, I’d say that supply and demand will prop up prices here better than in San Diego. Sacramento though, watch out.

What’s different about the Bay Area? First off, it’s a hell of a lot nicer than San Diego.

What about San Jose? Santa Clara? Alameda? Oakland? South SF? I can think of some nasty places in the bay area. SF is a nice city, sure, also Sausalito/Tiburon, Santa Cruz. But of course La Jolla, RSF, and Encinitas here are really nice also.

Housing prices in the bay area will never fall because of all the high-tech jobs up there. Oh wait those are all in Bangalore now. Oh well, you’ve still got all those Google-zillionaires, what are there, 1000 of them? That should be enough to maintain high home prices in the bay area forever.

Here is a site that is decent at telling what is going on in the bay area.

http://www.creeksiderealty.com/

Go to the “update” section and look at the February 2 report.

You will see that the “relative strength” that Rich Toscano posted about yesterday has NOT occurred in the bay area in January. Read that again. Not even a dead cat bounce!

Caveat: The narrative at this particular web site reads a little bit like a speech by Alan Greenspan, i.e. it is circumspect so as not to offend anyone (read: sellers and fellow realtors). However, read it carefully and it is clear what Richard Calhoun is really saying.

We’re going DOWN!