Hmmmm…so the results are in.

The median home PRICE in California is expected to drip, er, drop 2% in 2007 while home sales will drop 7% compared to 2006.

But what about us here in the Bay Area?

Chris Thornberg, an economist with Bay Area-based Beacon Economics claims “The market is flat and the bubble has popped.” Ouch, that is harsh.

While the market has clearly downshifted from record-breaking sales of the past 4 years, what we are seeing isn’t a pop, but a smooth landing, perhaps with a little turbulence. Even though the market is tipping towards buyers, here in Berkeley and Oakland, it is still possible to see multiple offers. What? Multiple offers? Even this past week a home in the El Cerrito hills had 7 offers! Why? Price. What was that? PRICE.

Over the past year the real estate market was characterized by a gap between buyers and sellers. Buyers no longer feel a sense of urgency because inventory is higher; sellers, despite sensing a decline in the market, are still hoping to capitalize on their equity, even at the risk of taking longer to sell.

Since last month we’ve seen interest rates go down, the stock market go up, and gas prices go down. September’s sluggish market seems to have given way to a much more promising October. Buyers are much more optimistic and sellers are getting realistic with their pricing strategies. PRICE. To be successful in today’s market, you may need to look beyond the media frenzy and just have patience. Could we be looking at a revival of the Bay Area’s entry-level market? Buyers can only hope.