I’m one of those people who will be DIRECTLY hurt by a declining market – I still think it’s going to happen, though and I can’t see any reason why it won’t.
In my mind it’s as simple as this – people will stretch and pay 50% of their income for housing when they think there’s an upside to it. Most people won’t continue to do that once it becomes clear there is no short term gains to be had and when their financing crutch gets taken away. There’s still an income gap that can’t be closed, too.
I agree that Oceanside was undervalued for a long time relative to its attributes, and good for the people who were smart enough to recognize that and benefit from it. But that area is by no means the most stable market in the region – I’m already seeing a couple areas that are taking a beating and a couple more areas that are teetering. Hopefully you were smart enough to stay away from the back gate area near Pendleton – that area’s eventually going to end up awash in foreclosures.