Wow! This has been a wild time here in Southern California. We have seen real estate hit magnificent highs and plummet to about half of their top values. We have more than our share of "bank owned" homes in our market---in fact, they make up most of our market right now.

Here in Temecula/Murrieta - one hour north of San Diego - we are a town - city - with a middle to upper-middle population. When I talk to people, I have realized that these aren't the "dead beats" that were caught in "sub-prime" loans. There are basically two stories here. First there are the home owners that used their home as a "Bank Account"  that allowed them to have "extras"----boats, pools, hardscape, RVs---that their income didn't provide for. One day they they went to the bank and realized that they were overdrawn and they had to pay back the "overdraft". The other half just have had their income cut -- many because they were in some aspect of the real estate business - or have lost jobs! These are good, good people - smart people that can't can't make house payments, or any other payments, without a paycheck.

Normally in this kind of situation, people just sell their homes, and move to another area where they can find jobs---but this is not normal times! Homeowners are upside-down in their homes and businesses are cutting back across the board. But this too will pass and someday all of this will seem like a bad memory that has changed all of us.