Ex-SD: Certain homebuilders are already making the move to smaller homes. Those monolithic 4,000sf monsters will probably go the way of the dodo. Too expensive to maintain for one thing. Can you imagine cooling a 4,000sf home through a Temecula summer?

I think even the ultra-high end will feel something of a pinch as well. There are homes fronting the SF Bay that are knocking fairly significant chunks off of their asking price. The house Burt Reynolds owns in Florida was just reduced in price by a large amount as well.