Alan Greenspan apparently agrees with me (see my previous posts "Van Eck", "Bubble", "Market Update")
The Washington Post, among others, reported that former Federal Reserve Chairman Alan Greenspan's said that prices may be lower in 2006 vs. 2005, but that "the worst of this may well be over."
The bottom line is you should listen to market stats from people with access to the best and NEWEST information. The worst sources are general news sources like the local paper, national weekly magazines, and TV news. Your mother-in-law who attends Bingo for her information isn't the person to listen to either, nor are your well intentioned friends. The newspapers get old information (new to them is 3 months old) and report on it as if it's happening now. NO IT'S NOT, it is OLD NEWS.
As a Realtor with access to the latest Sales data in the Association's MLS system, I can tell you how quickly (or not) homes are selling, how much they are selling for compared to any time period you are interested in, etc. Plus, as an active Listing and Selling Agent of homes in San Francisco, I can report on foot traffic at Open Houses, and how many Buyers and Sellers are contacting me. From January to March of 2006 it was bad, really bad in some areas. To me, that was the Bubble. Certain areas in San Francisco got hammered dropping at least 20%. More popular areas were only down slightly or flat, but certainly not active. However, activity seemed to pick up in the ensuing months, and immediately after Labor Day my phone started ringing off the hook by Buyers & Sellers alike. Throughout the city other Realtors are reporting similar activity. It seems to be a pretty darn hot market right now. Watch out, we could take off again.