The housing market is cyclical. It is not consistent from area to area. Prices go up and sometimes, as we know all too well, they go down. The Bay Area median home price (all homes and condos) dropped in August of 2013 to $540,000 from the July figure of $562,000. (See SF Bay Area Housing Trends above) It is still well below the June-July 2007 peak of $665,000. Sales volume also dropped in August but this is a normal characteristic of the market according to DQ News, the source of the sales data I track. The market trend line continues upward but, for at least one month, the bloom is off of the rose. The Fed will continue to inflate the economy, likely due to the still-less-than-rosy housing market and the miserable nationwide labor participation rate. Putting the brakes on the housing market with a slower velocity of money would not go well when many people are still un- or under- employed. These sure are interesting economic times.