Not the problem. A 40% decrease in home value is not something to worry about as much as other indicators. I don’t know if anyone remembers the 70% decrease in home values in the Antelope Valley of Southern California back in the early 90’s?

The index that should be worried over is the percentage of homes nationwide that are in foreclosure. Currently just over 1% nationwide. (I know in some markets it is higher – as much as 20%) In the Great Depression, that number was 40% nationwide.

Going back to 2002-2003 prices in SoCal is really not that bad a thing.