Thursday, January 20, 2005

S.F. Fed president doesn't see Bay Area housing bubble

San Francisco Federal Reserve President Janet Yellen said Thursday that she doesn't see a bubble in Bay Area home prices despite rapid appreciation in recent years.

"I certainly don't see a bubble," Yellen told an audience of 250 people at a luncheon sponsored by the San Francisco Financial Women's Association and the Security Analysts of San Francisco.

Yellen quickly added that the pace of housing appreciation may slow in the years ahead, adding that she doesn't anticipate annual increases of 25 percent to 30 percent to continue for a decade.

Yellen focused much of her prepared remarks on why she feels inflation remains under control.

"When I look at all of the elements that influence inflation ... it seems that the most likely outcome over the next year or so is that inflation will remain well contained," she said. "While I see a lot of uncertainty in the outlook, taken together the risks appear to be reasonably well balanced."