Psychology drives California Real Estate Period in my opinion.

That’s very true. And just as the psychology pushed prices higher than they should have gone, it will push them lower than they should go at the other end of the cycle. The conventional wisdom will change in the next few years. You’ve just got to be willing to wait for Joe McAverage and his fellow Duh-mericans to become as afraid of buying a house as they became of buying tech stocks after the internet bubble collapsed.