Housing prices and the number of sales in the Bay Area have taken a solid thumping this year, but a panel of residential real estate experts agrees the market circumstances for buyers and sellers in 2002 are robust.

Home buyers, particularly those looking at mid-priced values, will have a range of locations and types of homes from which to pick, according to participants in The Chronicle year-end residential roundtable that convened earlier this month.

For those selling next year, they agreed, the pricing strategy will depend on economic factors going beyond the usual real estate factor. The weather vanes include regional employment and business conditions.

The roundtable members were Peter Campbell of Red Oak Realty in Berkeley, Emmet "Skip" Cashin III of Cashin Co. Realtors on the Peninsula and Bill Drypolcher of Zephyr Real Estate in San Francisco.

Questioning them were The Chronicle's Bill Burnett, Susan Fornoff, Richard Paoli and Judy Richter.

Q: Can you summarize where this year has been?

Campbell: It's been a very good year for my company, and for the East Bay, in general, the market has been strong all year. We're seeing the strength carry into next year.

The number of transactions has probably fallen off a bit, although I spoke with my escrow coordinator last night, and her take is that we will end up very strong. Our number of transactions will exceed what we did all of last year. The quality of the transactions will be better also.

From what I hear, we're blessed in the East Bay. Prices are probably more reasonable than they are in many other areas, and, for that reason, I think we capture a lot of the demand for housing.

The strength seems to be pretty much throughout the range of prices, although when you get up above $700,000 to $800,000, things seem to be a little weak.

I ran some figures to see what's happened with average sales price over the last five months, and I chose Berkeley-Albany-Kensington-El Cerrito, which is the core of my business. The average price since July has gone from $471,000 to $509,000.

There was a dip in September but a recovery somewhat in October and then substantially higher in November. The number of transactions appears to be declining.

We -haven't had a traditional holiday season in about four years, meaning a slowdown from Thanksgiving to Super Bowl Sunday. We may see that slowdown this year.

Cashin: In our market, San Mateo-Santa Clara counties, I would say prices have softened. Buyers are trying to pay 10 percent below market while sellers are trying to get 10 percent over market. So price points have to be at a reasonable range to promote an offer. Buyers are more selective.

That's not saying we have been heavily hit because we -haven't. There's been huge pent-up demand from the previous years. People who -couldn't compete in '99 for housing, a whole new section of the marketplace, are looking to buy.

Interest rates are the driving force, have been all year, and overall it's been a very successful year in the housing market, both new and resale.

Drypolcher: I can speak for San Francisco, and I've run the numbers for the first 11 months of this year and compared them to 2000.

The city is basically flat to a bit down in sales price, and total deals are down, which means that we've probably taken a 15-20 percent total volume hit for this year, or will, for those 11 months.

I'd say if you have a house that's listed around $400,000 in San Francisco, you can count on multiple offers and its going over asking. If you have a house listed in Pacific Heights for $3 million, you probably are not going to get multiple offers.

We're in a very big state of flux, although our numbers are OK. We're not getting the same purchase prices we did. It's down slightly. It's just that the volume of deals -isn't there.

Q: In San Francisco, what's hot right now and what's not?

Drypolcher: In San Francisco, it's $400,000-and-under list price, and you'll still get multiple offers. And I agree, interest rates are fueling the market - if we had 8 or 9 or 10 percent interest rates, we'd be in big trouble.

But you can get a three-year ARM (adjustable rate mortgage) for 5« percent. So if you're going to roll the dice . . . I just did, actually, on a piece of property. I took a three-year ARM at 5«, no points, and that was up from 5ð because I missed the dip (in November).

Q: But how many houses are on the market in San Francisco at $400,000?

Drypolcher: Not so many. They're in nontraditional areas - Bayview, Bayview Heights, Visitacion Valley.

I sell what I call mid-priced homes in Noe Valley, and they're now $1 million. It scares me that a remodeled five-room home with a peekaboo view and a one-car garage sells for $1 million in the area that I always thought was the affordable area of San Francisco.

However, if you're willing to go to those outlying areas, you still see a fair amount out there. And frankly, we're driving those first-time buyers, both physically and mentally, out to those outlying areas.

Q: And on the Peninsula?

Cashin: On the Peninsula, the bargains are in the overlooked markets, being defined as Foster City, Brisbane, Half Moon Bay. Parts of Redwood City are the sleeper markets.

You go farther south, where the valley's been hit, with unemployment significant right now in the technology recession - I think all those outlying markets can be tremendous buys.

People forget about the coast. People forget about Foster City. I think just by spending a little time, they can get great values in all prices, with condominiums, townhouses and homes. Take a drive, research and evaluate.

Sunnyvale definitely, Mountain View definitely, a good amount of Santa Clara. Then you go to Gilroy and Morgan Hill, which are just popping with new houses, new developments.

It's a longer commute, but they're overlooked areas, kind of the borders of the valley.

And quality of life comes back to driving time, in my estimation, and one of the biggest issues we have in the Bay Area is traffic for the next several years.

Q: And in the East Bay around Berkeley?

Campbell: I think of the East Bay as a bargain because our average prices are lower than in San Francisco and the Peninsula. Oakland, Berkeley, Albany, parts of Richmond, you can buy a tremendous amount of home for your money. Maybe we're an outlying area, but I think the whole East Bay is a bargain.

Within the East Bay, there are less expensive areas. The Richmond area tends to be $400,000 or less, and more like $300,000 or less in most areas. Lots of areas in Oakland are very affordable. Berkeley runs from $200,000 or so up to $2 million.

Some areas that used to be very affordable - the Fourth Street area (in Berkeley), for instance, an industrial area with cracker-box houses, now you can spend $400,000 to $500,000 in that area.

Q: Are there any areas where you see something like that happening five years from now?

Campbell: Emeryville probably is an overlooked area. It's come alive. A very progressive city that's come alive in the last five or 10 years. Not afraid of growth, and I think you'll see increased demand for housing in Emeryville as time goes on.

Certainly there are a lot of yet-to-be-gentrified areas of Oakland that have come alive.

Q: And along the Peninsula?

Cashin: Go over the hill to Half Moon Bay, and there's anti-growth there, but that side of the bay has been a sleeper for years. It's got gorgeous quality of life. It's got trees, it's got skyline. Up and down the coast is magnificent, and you're 20 minutes from anything.

Q: What about East Palo Alto?

Cashin: That sits right in the center of the marketplace so well with bridges and transportation, and it's come a long way. If somebody wanted to research a real buying opportunity, that would be someplace I'd check out.

Q: Are there areas for change in San Francisco in the future?

Drypolcher: Unfortunately, San Francisco is not housing-driven.

We have a very strong tenant population that feels they have a right to control their destiny in excess of what the laws say they do at this point.

I -haven't seen the strength I would like from mayors on both sides, right and left, through to and including our current senator, to where they put housing as a priority along with homeless and tenants. Until this city becomes housing-driven, housing-driven politics is not going to happen.

So what'll happen is that we will be talking about these alternative places to be gentrified, where the people that own will sell their one home, and the people who are left or renting will have the same NIMBY (not in my backyard) problem that we've had for years.

I'm not optimistic that San Francisco is ever going to be able to solve this. I think that my kids are going to be fighting the same problem. And when less than 30 percent of the people in San Francisco own homes and more than 70 percent rent, that's the problem you have. And we -don't have any space anyway.

Q: If you were planning to sell your house in 2002, what would be your strategy?

Campbell: Same as it was this year. Price it right. I have a little diagram here which tells it all. (He holds up a piece of paper with a U-shaped line, and everyone laughs.)

That's a diagram of what the market does. The market can go down, and it can go up. You always want to be ahead of the market in your pricing.

If prices are going up and you price it above the market price, you're going to have to wait for the market to catch up. In a down market, if you price above where the price point is, it's never going to sell, so you want to be a little below the price point to let the market come down to you and to generate that activity.

We've found that any property that is priced well - 10 or 15 percent below market - is going to generate multiple offers and sell for its true market value. If you have 10 or 15 or 20 or 30 people bidding on the same property, you're going to find out what the true market value is.

We've counseled our sellers to not accept the first offer that comes along 20 minutes after their house comes on the market. Give the market a chance to see the house, buyers a chance to look at it, investigate it, compare it. That way everybody who's interested in your particular home will have a chance to look at it and make an offer on it.

It makes our job harder because we write 10 offers for every one that gets accepted. And we probably show at least 10 properties for each offer we write.

In our area, we're still having hundreds of people coming through open houses on the weekends. We're still getting lots and lots of showings on properties. There's a lot of interest, a lot of competitiveness in our area. When it drops off as it has in San Francisco, the strategy will be different, although the pricing strategy will still be the same.

Drypolcher: In San Francisco we've gone from, say, 110 percent of listing price to 95, so it looks like we're pricing them right at this point.

The worst thing you can do in San Francisco is fool around with a house for three weeks, hold it open three times and have a brokers open (house) three times and get no offers. Your strategy is completely screwed up, and the seller says, "What are you doing?"

So we've learned from the scratches on our backs that we're there to sell houses, not to play some game. If the guy liked what you listed it for and somebody comes in in a minute, an hour, a day or a week and gives you the offer that the comps say is there and that the seller feels comfortable with, we're telling them to accept the offer.

The difference we have is that we have a flat or slightly declining market, so we have to take the offer when it shows up.

Cashin: I see two components. On the merchandising side, it's setting the stage for a home. You've all heard about staging. It's putting in color, it's putting in green, it's painting the front door. It's all those things. It's having a little soft music in the background, like walking into Nieman Marcus or Macy's. If the house is vacant, you have the heat on in the winter.

People buy what they see. Most buyers -don't have an imagination, -can't visualize how big this room is if it's totally cluttered with furniture.

But the most significant point is the price point. In the last year, last 24 months, the price spike was totally artificial. Homes were selling 110, 115,

120 percent of asking. Today, as we've heard, it's a realistic marketplace. They're selling 97 percent, 95 percent of asking.

So people are coming in. They're making proposals. They're complimenting the home seller: "We like your home. We want to make it our home. Here's the price we'll offer."

Terms are starting to come back into play somewhat. People -aren't paying all cash. They -aren't paying 50 percent in cash. They're going to the banks, getting 80 percent mortgages.

Q: What about staging as a selling strategy?

Campbell: Kind of a cottage industry has developed over the last few years in staging, and people are doing that a lot. Whether it really has helped properties sell faster or not, I -don't know.

If you stage it and get 15 offers 10 days after you put it on the market and you -don't stage it and you get 10 offers 10 days after you put it on the market, has the staging done that much? I'm not sure.

Drypolcher: It's very expensive. Generally speaking, we try to get the home seller to pay for it, but many times the agents participate. We're talking in San Francisco for a mid-sized home, somewhere between $7,000 and $10,000.

It does work. There are times for it. If you have a vacant house, fine, I think it works. It has its place. I'm less inclined to spend that kind of money unless the seller wants to participate.

Q: What's your advice for buyers?

Drypolcher: I know that Realtors always say it's a good time to buy now. But you've got a steady market and the lowest interest rates we've had in years. What are you waiting for? If any of you are waiting for the prices to come down farther, are you willing to risk your house for the rest of your life on that bet?

Campbell: Going back to my clients 30 years ago, wondering if they were paying too much for a $20,000 house; they said the same thing 20 years ago for a house at $100,000. Today we're saying it about $500,000 for this little two- bedroom house. Ten years from now, is a million dollars too much for this little house?

Cashin: Housing is going to remain robust. We have pent-up demand. Low mortgages. Low supply. We've got the Echo Boomers coming into the marketplace, the Baby Boomers' kids who are coming into buying age. My kids. They're fueling the economy.

And you have the housing wealth effect - consumer confidence is positive in regard to that.