Ms. San Francisco Real Estate (Janice Lee)

The end of 2011 brought a decline in the number of homes for sale throughout the city, setting up a seller’s market with prices trending up. Stronger affordability conditions, a lower cost of owning versus renting, and declining foreclosures, continue to steer the San Francisco housing market in a positive direction. Single-Family Homes Even though inventory dropped citywide by 48.5 percent compared to December 2010, the number of homes under contract only fell by a minimal 7.4 percent, while the number of homes sold dipped by 13.9 percent, ending the month at 199 properties. For homes that were priced below $700,000, the months of supply inventory fell by 66.8 percent to a reading of 1 month. For higher priced homes between $700,000 and $1.2 million, the months of supply inventory fell by 65.6 percent to 1.2 months. These short readings continue to indicate a seller’s market, where sellers have more leveraging power over home buyers.

While the housing market had its challenges in recent years, there could be reason for optimism as we begin the new year. Some of the nation’s top housing economists believe that the worst of the downturn may be over, and predict we’ll see gradual improvement in home sales and prices this year. That would be good news for both home sellers as well as potential buyers, many of whom have been sitting on the sidelines waiting for confirmation that the real estate market is truly on the mend before they take the plunge and buy. Lawrence Yun, chief economist of the National Association of Realtors, said in his annual forecast that home sales should be stronger in 2012. “There is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely,” he said in a NAR news release. “This demand could quickly stimulate the market when conditions improve.” Housing demand will also be driven by the health of the n

NEWS - January 2012 Ok, I know many of us have been saying this for some time now, but when the news media starts saying it – well, I guess that makes people stand up and take notice. a number of recent articles in the national press are now saying that it might be the right time for consumers, who have largely been on the sidelines, to jump back into the housing market. I understand why potential buyers, whether first-timers or move-up buyers, remain cautious given all the economic headwinds and bad news out there. Economic growth has been slow, the jobless rate too high, and don’t even get me started about the politics in Washington, the euro-zone debt problems and the challenges facing Greece. But I often urge buyers to examine what I like to call your “personal economy.” That is, if you have a steady job, reasonable credit, and enough savings for a solid down payment, you might want to take a deep breath and think about taking the leap into the housing market while p