According to the National association of Realtors, Riverside/San Bernardino was number 3 in the biggest year over year price decline in the US for the second quarter of 2008. According to their data Riv/SB saw the median price fall 32.7% to $265K. We were beat out by Sacramento, number 1 with a decline of 35.6%, and Fort Meyers Florida, #2 with a decline of 33.1%. It's hard to believe those two areas declined that much. They started tanking at least a year before we did here in SoCal.
So what can we look forward to in SoCal. I think the year over year sales numbers will continue to improve but the prices will continue to decline (Only because last years numbers in the fall were so pathetic). Short of a nuclear winter I don't see how they could get any worse than last year. So look for the headlines talking about increases in sales. The prices are still higher than the traditional "normal" levels by at least 20%. In most bubbles prices undershoot the mean line. So they very probably will fall farther than the normal levels.
Foreclosures will keep increasing. As the Alt-A wave hits we will see even more foreclosures. Last month was a record. The state is seeing over 1300 foreclosures a day and the number is climbing. The unemployment numbers are getting worse. Th IE lost 22,000 jobs LAST MONTH! I don't know if you saw the news about the number of applicants for the new retails stores like Target and WalMart. They are getting THOUSANDS of applications for a few hundred menial wage jobs.
The spring/summer selling season is winding down. As the sales numbers drop off and the foreclosures keep mounting the inventory levels will probably start to climb again. They have held steady through most of this year so far. There is news that Fannie is considering bulk sales of their REO properties to investment groups. Investment groups don't pay market rate. I don't know what those groups will pay but it's not going to be anywhere near the current market. They will only buy if they have a decent cushion against further price declines. Sounds like the banks are getting desperate.
It should be an interesting winter!