LA resident here, and agree on the last two points.
I’ve been watching Ziprealty inventories for months now and I’ve recently seen a significant increase in high end listings.
I mentioned this elsewhere; I’d argue that particularly in LA most of the high end drop-off is due more to tightened lending than it is to resetting loans, recast payments, or job losses.
Sub-prime was a disaster that set in motion a return to what lending standards should be. Once the fallout of bad “prime”, alt-a, ninja, I/O, option ARMs starts hitting the high-end will suffer just as much.
Don’t forget “high-end” was middle class families who moved up the housing chain just like sub-prime borrowers.