I think that using downtown SD condos as an example of anything is a poor choice.

There is a very thin market of people who would want to live in a multi story urban building with limited parking.
It’s a hassle with dogs, and kids, and schools.

I don’t see rental prices for suburban houses falling that much. The support of rental prices is what will determine the real value of a house. (The value doesn’t determine the rental market)

People can afford current market rents with $50K-$80K+ gross income, it’s mortgage payments that they cannot afford.

Many people who had $3000+ monthly mortgage payments are happy to pay $2000+ for a rental and not have to worry about maintenance and insurance.

This isn’t the 90’s downturn when people lost jobs and then lost houses. Most people that are losing houses still have jobs, and they need a place to live.

Decent rentals in the $1600-$3000 monthly rent range are very affordable to many.
McMansions were never designed to be sensible rentals.
Foolish people tried to make them that.

In my younger days, the good rentals were called “bread and butter” units, usually never more than a 2 or 3 bedroom homes in average neighborhoods.
Having HOA’s and condo assn fees for a rental was not a popular choice.

People didn’t talk about buying SFR’s in high end neighborhoods as investments in those days. The concept of being a landlord has changed with the times, and many people are just out of touch with reality.