The housing market in California is splintering into various broken segments. In one area, you have lower priced beaten down homes flying off the market like pancakes. Yet in these areas, you have to wonder what will happen once the major discounts and inventory run out? Next, you have mid-priced areas that are selling in low numbers but at relatively stable prices. This is the next market to tank because of the large amount of Alt-A and Pay Option ARMs hovering in those markets. These areas had a stronger buffer because of the structure of the mortgages but make no mistake, they will be coming down. And finally, you have the higher priced regions stalling out.
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