There is an old saying that if you wish hard enough for something, it will eventually happen. The same can probably be said for the so called housing bubble that we have been hearing about for over a year. There has been so much talk about it that both buyers and sellers have been taking it to heart. Some buyers have retreated temporarily from the market, convinced that the market is about to crash and they will be positioned to swoop in and purchase their dream home for pennies on the dollar later. Some sellers, especially those who are planning to retire soon and move to a less expensive area, have decided to sell now while the going is good and rent temporarily. That I can understand, but the buyers who are waiting for the market to crash may be waiting for a long time.

I have been living in the mid San Francisco area (Palo Alto, Menlo Park, Mountain View, Atherton, Portola Valley, etc.) since 1972. There was a huge run-up in prices in the late 1970s and people started to talk about a housing bubble then. It is true that circumstances changed in the early 1980s when interest rates rose to 18% and above for 1^st mortgages and even higher for seconds. It was very difficult to sell a house during that period, but eventually rates came down and houses started moving again. The same was true in the late 10980s vs the early 1990s, and again in 2000/2001 vs 2002. However, not once in all of this time have I seen housing prices drop to the level they were at before the run-up. People who bought during those prior run-ups, even those who bought right at the peak, are might happy they did so, as their homes have continued to appreciate despite the ups and the downs. The only real lesson to be learned here is to try to avoid SELLING during the downs! Think of housing as a long term investment and work with an experienced agent who has your best interests in mind and you can hardly go wrong.

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