San Francisco Smells Poppy

The San Francisco Chronicle has a story today about the Bay Area housing market, which some say appears to be in the first days of a bubble deflation, though only time will tell. A comparison of sales from July 2004 to July 2005 revealed a drop of almost 11 percent as prices also fell. The median price of a home was $643,000 in July, a whole $1,000 less than in June (big deal), but still 18 percent more than last year's mid-year median. This from the Chronicle:

For the last few years, economists have fretted that the Bay Area and other high-priced housing markets represent bubbles on the verge of popping -- in the worst-case scenario -- or at least leaking some air.

"It's going to take several more months of information before we know whether this month was the turning point, but it sure smells like it," said Ed Leamer, economist at the UCLA Anderson Forecast.