Oceanside's Arrowood community, including KB Homes' Windham and Buckingham tracts, is an area of homes less than 5 years old with new construction still ongoing. Unfortunately, this mix has caused it to have some of the biggest price drops (from the peak) that we have seen in Oceanside.

As the inventory of bank owned homes has dwindled, and multiple offer situations has caused many buyers to miss out, the new home builders (KB, Richmond American, Fieldstone, and John Laing) have been very aggressive in both their pricing and the incentives offered which is now translating into decent sales activity.

For example, of the 15 homes currently in escrow, 4 are bank owned, 1 is a short sale, 1 is a non-distressed seller, and 9 are new homes. Of homes sold in the past 3 months, 8 were bank owned, 3 short sales, 2 non-distressed, and 4 were new homes.

And to see how skewed those numbers are, of the 36 Active listings, 6 are bank owned, 17 are short sales, 9 are non-distressed, and 4 are new homes.

It's areas like this in San Diego County which will still see some price drop through 2008. Other neighborhoods are faring better and should see prices now levelling since inventory is much less than it was 6 months ago. Just remember, having an experienced, knowledgeable, local real estate agent can help buyers figure out what neighborhoods make the most sense, and how to negotiate best with REOs, short sales, or new homes.