California offers most bubble markets, but still far from busting

"Even in the highest-flying markets", such as California, the LATimes.com is reporting, "it would take four straight quarters of economic recession — rising unemployment, flat or declining household incomes — to precipitate a housing price bust. And not one of the 27 has yet racked up even one quarter of recession, Youngblood says. Any serious housing price deflation — if indeed it is in the cards — is unlikely for at least a year."

The article does point out that double digit gains will not continue, almost under any circumstances.

Ultimately, home prices in Southern California should continually slow in appreciation, but not lose value any time soon.

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