I think what you are seeing is the bottom half of the market in San Diego and much of Southern California basically becoming an unmitigated disaster. The top half of the market not as much.
On the way up, it was subprime & Alt-A loans that enable entry level buyers to bid up the prices of low-end houses. This enabled "move-up" buyers to bid up the prices of more expensive houses.
Now, the opposite is happening. The restrictions of sub-prime loans prevented entry level buyers to enter the market. This causes trouble in the low-end of the market first (we are currently seeing this).
Eventually, the effect will ripple up to the more expensive areas. In real estate, everything is connected.
