I agree with you lendingbubble. The laws of econ 101 will come into to play. The development that I am following this week is the “melt down” of the HB’s on wall street. TOL just broke 30 as I write this. I am also monitoring OCRenters bubbletracking. San Diego’s inventory is steadily rising and I don’t see that trend stopping anytime soon (I am on record for the population adjusted record inventory to be reached on July 15 by the way). HB’s are seriously under the gun right now. So you have a situation where inventory is piling up and HB’s are moving into survival of the fittest mode. Bottom line is they will cut prices to move inventory period. And as you mentioned “how ’bout that increase in notices of default, by the way?”. All of the elements that put downward pressure on prices are in place. I am open minded to prices flattening out but if these trends sustain themselves I just don’t see how.