I too am betting on prices going down in the next few years in Southern California. But a lot of my reasoning is gut instinct. What makes you think the hard evidence is so overwhelming? Couldn’t the Fed lower short-term rates, and Congress, through FNMA etc, support easy loans, and in a few months prices would be increasing again? Or couldn’t a place like La Jolla see an influx of wealth from abroad, driving prices for good locations to currently unimaginable levels like what’s happened in London?
