Looks like the investors are fleeing away from the real estate market now.
Investors are not really into holding the real estate as rental but flipping after few months for profit.

I see the similar craziness in real estate what I saw in 2006/7. I was under pressure in 2006/7 to buy but finally bought my second house in 2011.
IN 2006/7, people told me few facts stating the reason that prices in san diego would never go down:
here are few of them:

1) In SD, land is limited unlike tx, you have desert on one side and ocean on another. With tough zoning in CA, it makes residential land more precious.

2) SD has best weather , everyone wants to live here so prices can never go down

3) SD has very rich people with lots of money. This would make real estate never go down

3) SD has companies like QCOM where people are in very high paying jobs with tons of stock options. Today, the QCOM is not the same QCOM it was 8 years back. The myth is broke that in QCOM you have a permanent job and you ca be millionaire because of stocks. QCOM stock is in doldrums.

Few of my buddies went head and bought houses for 800/900K in SD in 2008. Those houses dropped to 500/600K in 2011.

Currently When I talk to realtor they say: One should buy now lest priced out forever LOL

Everyone says: this time is different.

I learn a lot from this forum and hats off to the people here.

I am looking for a house to buy now and am in the sidelines.. but I see similar craziness in the areas I’m interested in and this does not portend good per my gut feeling.

Off topic: I see big flight of high paying knowledge based jobs out of USA in general and out of san diego in particular to cheaper cost places. This again portend bad for middle class jobs..