A true story: every time a high school friend took a test in French class, she would swear she flunked. Instead, she got straight A’s. One day, worrying herself into a tizzy, she finally flunked her test. Her mother’s response? “Finally! You achieved what you set out to do.”

Things aren’t so different in the San Francisco real estate market. After the burst of the dot-com bubble, pessimistic buyers have expected prices in the city would never recover. But almost immediately, prices continued to rise, reaching historic highs year after year.

At long last, at the end of 2008, we achieved what we set out to do: In December, average prices were down 19% year over year. You might say we’ve created our own reality.

But let us not forget that this is not the end of the world. Those who purchased 5 years prior are still at an average of 18% appreciation. And 13 years prior? 178%.

As we have seen many times in our past, the San Francisco market is cyclical. So if we can, let’s be patient. The market has done right by us in the past – it should do right by us in the future.

Appreciation_SF_Q408.pdf