in SoCal for housing to be as affordable as it was before the run up it has to fall at least 40% from current prices.

I know townhomes in Aliso Viejo which were selling for $275k in 2001 are now appraised at $450k. These homes should be selling for $250k at most.

I don’t think income or affordability has changed much since 2000, in addition OC has been very hard hit right now due to mass layoffs. Factor in cost of oil and other commodities and you can see affordability should be lower than in 2000.