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San Francisco real estate has been up and down over the last few years, but local Realtors believe the area is primed for a comeback as the economy regains momentum.

"Housing is well positioned for solid gains," say Realtors Bernard Pizzoli and Terry Rodriquez ( Post Questions Answers Real Estate Forum Discussion Board Expert Advice Help Tips ). "By most measures 2002 was the strongest year for housing on record, despite the 2001 recession and weak ensuing recovery. Residential investment, home sales, homeownership rates and home prices all improved last year. But anemic overall economic growth has nevertheless taken its toll, sending mortgage delinquency rates up while pushing down rents in San Francisco and the Bay Area."

They continue, "Rising home values and falling interest rates gave housing a sturdy boost in the first half of 2003. The already scarce supply of smaller, less costly housing is shrinking, with especially sharp losses among two to four-unit buildings. These properties are selling for over the asking price. The soft areas in San Francisco are single-family residences and condominiums selling in the multi-million dollar range. The increase in mortgage debt has yet to create serious problems. Thanks to lower interest rates, owners have been able to increase their debt loads without necessarily adding to their monthly payments. Strong home-price appreciation has increased home values, providing 88 percent of mortgage borrowers with equity of 20 percent or more in 2001. Only about four percent of mortgage borrowers had equity of less than five percent in that year. Higher interest rates could have a negative effect on home prices. Although the Federal Reserve recently trimmed short-term rates, long-term rates are on the rise. Home prices may moderate in San Francisco if interest rates move up over the next few years."

Realtor Jackquie Peterson says, "San Francisco's real estate market is what we would call a "more normal" market. January 1 - June 30, 2003 has had fewer sales than the same time frame in 2002. Prices in most, but not all neighborhoods, are up only slightly."

"Housing will show solid gains as the economy improves," predicts Realtor 'Uncle' Ben Coleman . "Low mortgage rates are resulting in consistent demands on the market. I expect the market to remain steady throughout the remainder of the quarter."

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