The Research Division of the NAR has produced a detailed analysis of the San Francisco & Bay Area market landscape. The short story seems to be that higher interest rates have been a drag on the market, new construction is down (propping prices up because of low supply), job creation is up after the tech bust, new jobs = new buyers, and if interest rates keep going up, bad things will happen.
It’s interesting to note that this study points out that mortgage delinquency for the first quarter of the year was well below the national average. My last post linked to an article that says foreclosure activity in spiking in the Bay Area. An important distinction: delinquency happens when an owner misses a payment, but foreclosures happen when an owner is about five months behind on his or her payments.