Despite the season, it’s hard to be jolly about what lies ahead for the Bay Area economy. The recovery should continue next year, but slowly, and the list of fiscal woes remains long.

But before I get to detailing the big economic challenges of 2011, it’s worth enumerating reasons to feel good about what the new year might hold.

Silicon Valley is perking up. In social media and mobile computing, the cognoscenti are debating whether the current frenzy is a boom or a bubble. Either way, it’s starting to make a dent in unemployment as companies like Google and Facebook hire every smart person they can. Traditional computer and communications equipment firms are seeing an upturn, too, which bodes well for the Valley’s ability to lead the state out of recession.

We’re investing in infrastructure. President Obama says this is a good time to spend money on roads, rails and other public works — and locally, it’s happening. The Bay Bridge, the Transbay Transit Center, Doyle Drive, the Caldecott Tunnel, Treasure Island and the Oakland Airport BART connector are just a few of the big projects under way. Questions remain about the wisdom of some of these investments, but they’re creating jobs, and 20 years from now, no one will remember the controversies.

The financial system is recovering. Nobody likes to celebrate the good fortune of bankers, but as a leading money center, the Bay Area has definitely benefited from the bailout of institutions like Wells Fargo and Bank of America. One of these days, they’ll even start lending again.

The consumer is coming back. The recent rebound in spending is not just a Bay Area phenomenon, but local retailers are sure relieved to see it. The renewed enthusiasm for shopping is also mirrored in the tourism business: It has been a solid visitor season in San Francisco, and next year should be strong as well.

It’s raining. A season or two of deluge is hardly a fix for the state’s water issues, and as many Southern Californians would testify today, there can be too much of a good thing. But last year’s wet weather, combined with the epic precipitation so far this year, will provide a big short-term boost for farmers, fishermen and outdoor businesses.

O.K. Now for the bad news:

The housing market is dead, dead, dead. Real estate has long been a huge driver of the California economy, but all signs suggest that a housing recovery is still years off. San Francisco and other highly attractive locales will bump along the bottom just fine, but those tract homes in Antioch are not going to be worth any more next year or the year after than they are today. With luck, they won’t be worth less.

The green energy glow is dimming. Washington’s failure to pass cap-and-trade legislation or otherwise regulate carbon emissions threatens a key pillar of the green energy business. Competition from China in solar power threatens another. California has kept the environmental faith — voters decisively rebuffed a proposed repeal of our own version of cap-and-trade this fall — but entrepreneurs need a national market to prosper.

The government financial crisis is real. Pension liabilities are an abstraction for most people, but not for bond traders. Recent activity in the municipal bond market suggests that defaults by city, county and even state governments are no longer considered out of the question; that will make it harder for government entities to finance themselves. But with politicians unwilling to take unpalatable actions, like raising taxes or abrogating labor agreements, the situation will only get worse.

More cuts in vital services are coming. With California governments broke, schools are going to pay the price. Big cuts in financing — on top of those that have already made California a proud 46th among states in per-student K-12 spending — are a near-certainty next year. Higher education and Medi-Cal will undoubtedly take big whacks, too. And if you can put off that visit to the Department of Motor Vehicles until 2015 or so, you should.

The constitutional convention won’t happen in 2011. People who think big about the future of California agree that fundamental political change is a key starting point. Alas, that’s not going to happen next year — unless Gov.-elect Jerry Brown has a big surprise in store.

And that might count as a holiday wish directed to our public officials: Surprise us! The status quo, after all, isn’t all that cheery.

This article also appears in the Bay Area edition of The New York Times.