After five years of magnificent, record breaking gains, the Bay Area housing market stumbled in 2006. Sales declined rapidly throughout the last 12 months.

November sales were down a whopping 26 percent since last year. Home prices have also started slipping. The median price for a home in the Bay Area is now $616,000. While this number may seem high to some buyers, it is quite devastating to those who bought a home last year when the median price was $625,000.

2007 Housing Market Predictions

Now, with 2007 upon us, many are hoping that the bubble has finally burst. They are looking to the future with optimism, eager to put the dismal numbers of 2006 out of sight and out of mind. Others though, are not as confident and feel that the 'correction' is just getting started.

The San Francisco Chronicle recently asked four industry insiders for their opinion on where the Bay Area housing market is headed in 2007. Not surprisingly, they received four very different answers.

The most optimistic of the quartet was Scott Anderson of Wells and Fargo Company. Like many people, Anderson has been following the California housing market rather closely for the last five years. Though he feels the downturn in 2006 was unpleasant, he maintains that it could have been much worse. He also thinks that things will be uphill from here, boldly predicting 'marginal appreciation' in the Bay Area for 2007.

Christopher Thornberg of the Bay Area based Beacon Economics has a completely different take. He has also been watching the California housing market for a significant period of time-six years total. According to him, 'the worst isn't over'. Thornberg points out that past housing trends have shown that corrections do not occur overnight. He sees more trouble for the Bay Area in 2007 and doesn't expect any appreciation before the year 2011.

Divination At Its Finest

If you are sick and tired of hearing housing predictions from boring economist and consultant types, and are wondering what others are thinking about the 2007 Bay Area housing market, you don't have far to look. Several publications have taken alternative routes to answer this question. For example, the popular news site, Examiner.com, recently asked two San Francisco psychics what they think the future will bring for Bay Area home prices.

Their answers were different (and a little vague). Sister Madalene predicts that Bay Area housing will 'remain a problem' through 2007. Terry Yoder has a different take and suggests that things will soon be stabilizing in the area once spring has past.

If you believe in psychics, consultants, or economists, you may have found a forecast to live by for 2007. If not, you're in the same boat with a lot of others and will simply have to sit back, ride the wave, and see where it takes you.