West of the 5, don’t count on it, particularly west of Camino Del Mar. I used to rent west of Camino Del Mar and the demand for those little houses on tiny lots was amazing and I expect will remain so. I had an opportnity to buy the 1,800+ 3 story house with a patio for a yard I lived in for around $1M in 1999 and passed it up. By 2005, it was worth several times that. I do think it has lost some value, but is still worth more than twice that 1999 price I would expect. Zillow says it is worth $2.6M now, but who knows what it is really worth.
Parts of Del Mar east of the 5 are in fact comming down in price quite a bit, just like other areas, particularly north of Via De La Valle, where prices have dropped more than other areas, certainly more than CV. I looked at a house last June that is now listing for $900k less.
