By Alice Chen If you've never been able to afford a home in the obscenely expensive Bay Area, now seems like an ideal time to buy. Local home prices have dropped nearly 30% between September 2007 and September 2008. But, prices in prime neighborhoods of areas like Berkeley, Cupertino and Hillsborough seem like they've barely budged.
What causes those neighborhood prices to remain so high? What drove up the prices in those neighborhoods in the first place? And what would make those neighborhoods obey basic economic/market principles? (i.e. average home prices in an area should be no more than 3 to 4 times the average salary.)
How can somebody afford a house in the Bay Area?
My piece will inform readers of indicators to observe to predict the bubble popping in prime areas, and will hopefully help them time their housing purchase.
I'm a freelance journalist whose work has appeared in the San Francisco Chronicle Magazine, Newsweek.com and Chicago Public Radio. I've also worked on staff at the Milwaukee Journal Sentinel, one of the largest daily newspapers in the Midwest. I earned my bachelor's degree in history and a minor in economics from Stanford, and my master's degree in journalism from Northwestern.
I'll provide a 600 word story explaining what caused the housing bubble in high-end Bay Area neighborhoods, and why that bubble hasn't burst. I plan to check in with economists, professors, researchers and other experts to help answer these questions.
