This just in…California, on average, will post a decline in appreciation. It was bound to happen: what goes up, must come down. But just how far down are we talking?

It depends on who you ask.

The California Association of Realtors believe the median home price in California will decline 2% to $550,000 in 2007 compared with $561,000 for 2006; in addition, sales are projected to decrease 7 percent to 447,500 units, compared with 481,200 units in 2006.

The economist with the brightest outlook, Scott Anderson of Wells Fargo & Co., says housing prices will rise next year, maybe by as much as 5 percent.

On the other end of the spectrum, consultant Christopher Thornberg of Beacon Economics says he doesn’t expect any significant appreciation until 2011 at the earliest.

David Lereah, chief economist for NAR, expects a moderate upward bounce after the cooling trend of 2006. The size of the bounce will be heavily dependent on how high interest rates rise and their impact on job creation.

Hmmm…so who is right and who is wrong? We will have to wait and see.

Here is what I do know:

The Bay Area as a whole is still strong. We live in one of the most eclectic, exciting and friendly places in all of California. People still want to live here. We have the best restaurants, universities, and recreation (I still live with the hope that I can add the 49ers back into this list). Yes, the market here has changed. Homes that are well priced are still receiving multiple offers, but not as many as a year ago. Many homes are sitting on the market longer, receiving one or no offers, and sellers are faced with having to reduce the price. The good news is that this shift in the market, along with historically low interest rates, makes for a great market for buyers. And how about investors? Perhaps there will be a resurgence…

Stay tuned.