by Calculated Risk on 12/14/2008 10:59:00 AM

Marni Leff Kottle write in the San Francisco Chronicle: S.F. feels the pain of real estate meltdown (hat tip Jim)

The downturn that slammed other parts of the Bay Area and the rest of the country didn't really begin inflicting serious pain on San Francisco until the second half of this year, real estate experts said. And while no one expects San Francisco to see the kind of foreclosures and bank sales that have become common in the East Bay, the city's real estate market is clearly suffering.

"San Francisco had managed to fool itself through most of 2008 into thinking that it wasn't going to suffer the same sort of issues that have hurt other places in the state," said Christopher Thornberg, an economist with the consulting firm Beacon Economics. "The last four or five months of the year, San Francisco has seen price declines that have been quite prominent. You can't have prices fall as much as they have across the bay without some impact on San Francisco itself."

OK, the price dynamics in San Francisco will be different than in the East Bay; East Bay prices have fallen faster because of all the foreclosures and distressed sales.

However prices will fall in San Francisco too, and by close to the same percentage as other areas in real terms, it will just take a little longer. I think those hoping for a price bottom in 2009 (in San Francisco) are way too optimistic. Some low end areas might be close to the bottom already.