VHF,

That's a very good article you posted re California residential real estate. I've lived in socal essentially all my life, and know the real estate market pretty well, and, unfortunately, what the writer indicates is happening and will happen is likely accurate. I don't think homes in general will fall by 50% in market value, but they will fall that far in many areas.

A lot of the "prime" loans are refi's, and if the Banks went after a few borrowers for deficiencies ($600,000 mortgage, home fetches $450,000 at foreclosure sale, leaving a $150,000 deficiency), that will serve to scare quite a few borrowers into staying in their homes and making the payments that many can actually afford. It wouldn't be difficult to widely publicize banks going after such types, since it rarely happens.

There are some areas where prices have barely been affected (near the coast, for the most part). Where I live, in Glendale, just 10 miles north of downtown LA, I would say we're down about 15%, but that is also neighborhood specific. I'm figuring about a 30% drop for my own home by the time things hit bottom.