“Are we in a housing bubble? No,” said Tim Cornwell, a principal with The Concord Group, real estate advisors who work for developers, home builders and financial institutions.

“We do have an affordability crisis, no doubt. But relative to fundamentals” San Francisco is not in a pricing bubble, he added.The distinction between an affordability crisis and a housing bubble is important, said Cornwell and Jed Kolko, chief economist with Trulia, who also spoke at the forum.An area, like San Francisco, has an affordability crisis when prices are high relative to an absolute benchmark like the percentage of income devoted to rent or a mortgage. A housing bubble occurs when prices are high relative to what is normal for the area, they said.

via San Francisco house prices: Bubble? What bubble? – San Francisco Business Times.