Prices Peaking / Market softening in SF Bay Area? What have you seen?

[J. Martin]

Are things softening in the Bay Area, and if so, are you changing/modifying any of your strategy because of it?

I was up at Bay Area Wealth Builder's RE meetup in Corte Madera (near Marin) last week with @Kathleen L. and the host, Michael  Morengello (sp?) was talking about the market in the North Bay softening, more days on market, softer prices. He is flipping, and is now only taking on deals that take 3 months or less b/c he doesn't want to get caught with inventory if there's a downturn in prices. He even sold his personal home to downsize, and is keeping a lot of personal cash on the sideline (as stated verbally by him in chatting after the meetup.)

@Account Closed

[Account Closed]

J, 

I agree with Andrew's and David's assessment above.  I see the same thing in Santa Clara County.  Activity has definitely picked up in the last 4 weeks or so.  Things were quite slow between May and mid August.  

The fact that we are closer to the top than the bottom doesn't mean that the market will not keep on going up.  In fact, it will continue to go up, but at what pace.  The faster we go up, the quicker we will top out.  Please note that the housing affordability index (HAI) for Santa Clara County currently stands at 19. It was at 11 in 2007 and 13 in 1989. 

I don't have a crystal ball.  I just follow data.  Just remember that IT'S NEVER DIFFERENT THIS TIME so tread carefully.  You have been warned.  :0)