Another Chronicle Cover Story -- only with a different tone

The Sunday Chronicle had another Kelly Zito article, this time with a headline spanning 3/4 of the cover of the paper. It usually takes the beginning of a war or the death of a president to get that much space on a cover devoted to one topic.

"HOUSING -- JUST COOL OR GOING COLD?"

Strangely enough, with the exception of a couple of the usual quotes from guys like Ed Leamer at the UCLA Anderson Forecast (who has been claiming that we were all going to the poorhouse since 1999), the article is amazingly upbeat and realistic. Knowing the lead times on articles, I will take no credit whatsoever after my posting on Friday for this change in attitude.

Click the link above and read the entire article for yourself. She put in some nice 25 year graphs showing exactly what I continue to refer to, that the market is strong and continues on an upward path, even through the roughest of markets, and has its usual downward blips in the Dec/Jan timeframe.

Some of the highlights:

• "At the end of the last two major housing booms in the early 1980s and 1990s, prices in most areas did not collapse."

• "On the coasts, you see price run-ups, and then instead of having large price declines, you have mild declines and flattening for a period -- it's what you'd call a stylized fact of the industry," said Andrew Leventis, economist at the Office of Federal Housing Enterprise Oversight, the overseer of mortgage titans Fannie Mae and Freddie Mac.

• "On the other hand, affordability indexes don't present the full picture. For one, roughly three-quarters of all home buyers in California are trade-up buyers who can spin equity into down payments on bigger, pricier houses."

• "...even in a slackening market, sellers often resist losing money on a property or simply not making as much as the Joneses next door. Sometimes that can mean sales volumes will decline, but prices will stay resilient; it's a phenomenon that could play out as this cycle wears on."

• "San Francisco may have more of a chance to not have a severe (correction) because it's so hard to build here," said UC Berkeley's Rosen. "The difficulty in putting on new supply protects home prices from big adjustments."

• "A tight supply of available land and housing supply is one hallmark of what Columbia University real estate professor Christopher Mayer calls a "superstar city," one in which price declines are relatively rare."

And there you have it... Lots of people who admit they really don't know what is going to happen, but look at things a bit more positively than we've seen in a while. And all of this goes back to supporting my post on Friday. It's a nice, balanced market out there right now, and from where I'm watching, it doesn't look like it's going to drop any time soon.