Both the arguments you advanced in support of your opinion are…highly questionable to say the least.

“1) The dollar is going to lose a tremendous amount of purchasing power in the next 10 years. In nominal terms, today’s housing prices will look a steal. ”

Okay, I need you to put your critical thinking cap on here. If a person buys a home for $750,000 dollars in 2005 and inflation occurs at a 4% annual rate, that means that in 2010 dollars, todays $750,000 will have to increase to $910,000+ just to stay in terms of “value”. Do you see that happening right now? No, you don’t. What you see happening right now is that 2005 purchase at $750k has declined to $700,000 in 2006 dollars, which at the 4% inflation rate would have been equal to a 2005 $672,000 purchase price, not $750,000.

“2) San Diego is NOT the same San Diego it was 10 years ago. There is a new high-tech worker that lives here but works elsewhere. Their payrolls are not reflected in crappy government statistics. ”

Name 3 of them. If anything, the homeowner class is actually in decline right now, courtesy of outmigration and equity flight; and yes I can personally name more than a dozen of those households.

BTW, the O.C. and L.A are both going to follow along in this downturn – they aren’t immune.