A tour bus drives past homes across from Alamo Square Park in San Francisco, the US, June 7, 2012. [Photo/IC]

According to a report based on the S& P Case-Shiller index, San Francisco home prices soared 23.1 percent in July year-on-year, leading to talk of a housing bubble among Chinese buyers.

But several experts disagree that they are the main contributors to the price rise. Many, including local real estate agents, regard the increase not as a bubble but rather a sign of recovery in the Bay Area housing market.

Patrick Carlisle, chief market analyst and vice-president of Paragon Real Estate Group, told China Daily: "It's not uncommon to see this sort of fast appreciation in the early years of a market recovery after a long recession. San Francisco is now two years into the recovery that began in early 2012.

In past cycles, recoveries have typically lasted five to seven years."

In 2007, the US housing market began to sputter, eventually affecting home prices in more than half the country. Prices that peaked in early 2006 began to decline in 2007 and reached new lows in 2012.

Carlisle believes housing prices will continue to appreciate but at a slower rate than in the past two years, adding that it will probably be between 5 to 10 percent. He said that while Chinese buyers have contributed to the continuing demand for San Francisco homes, he believes the main reason for the rapid price appreciation is the high-tech boom, which has brought people and employment.

Mark McLaughlin, CEO of Pacific Union International, shared Carlisle's assessment, saying: "Pacific Union does not feel this is a 'housing bubble'. In comparison with other large cities in the world, such as London, Hong Kong, Beijing, Tokyo and New York, prices in the Bay Area seem relatively affordable."

McLaughlin did say it is a pricier area than some others, driven by rising population, exceptional job growth and a very limited supply of land for new housing.

Regarding the direction of the market, "Pacific Union expects a 10 percent price appreciation in single-family homes next year and likely a 20 percent appreciation by 2017", McLaughlin said.

"We see a large influx of foreign capital - particularly from China - in the marketplace," he said. "Chinese investors represent approximately 9 percent of all home purchases in the Bay Area, though much higher percentages exist in some popular cities, such as 18 percent in San Francisco and 25 percent in Palo Alto."

Chinese buyers generally have a very long-term perspective on real estate acquisition, holding properties longer than other buyers, McLaughlin said, adding that the "hold" strategy further reduces inventory for sale and drives up housing prices.

In addition, many Chinese parents purchase homes for their children, Carlisle explained, adding that the Bay Area hosts some of the most prestigious universities in the world, including Stanford.

Other Chinese buyers have bought property, including luxury condominiums, as second homes or investments, Carlisle said.

According to Richard Lee, a real estate agent in Silicon Valley, home to much of the tech boom in the area, "the large majority of San Francisco homes are sold very quickly, without price reductions".

Carlisle said: "We are in a very low-inventory situation, so any additional buyers make the market that much tighter for buyers in general.

But so far, Chinese buyers are not a big enough percentage to make a significant difference."