Real estate is local. It is very local. If you want to understand home prices, you must look closely at your “nano-market.” In some case, this is a neighborhood but more often, it is a block or even side of the street! In San Francisco, home prices and market activity vary greatly due to architecture, type of housing (condo vs. TIC; single family; multi-unit), condition, and vacancy. If it’s vacant or will be at close of escrow, it will sell for more money.
Take a look at these numbers. They show year over year median home prices, days on market, and number of sales. In some areas, home prices have gone up! And yes, in some, they have gone down.
When folks tell me that the market here is a bubble bursting, I like to ask them where they got their information. Was it an article in the Chronicle taken from the Associated Press or documenting Bay Area or even California-wide activity? Was it CNN?