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California is in the heart of the bubble slowdown. After astronomical growth in the past four years, the market is regrouping with slowing sales and lowering prices. The increases of the past 4 years have priced the average homeowner out of the  market, and the retrenchment out of the exuberant optimism is now being replaced with a combination of fear and consternation.

Folks just have to remember that paper profit is illusional. You can not expect assets to continuously rise year over year. For example, imagine your house was priced at $250,000 4 years ago, and was worth $500,000 on paper in November of 2005. Now it is worth, 450,000, have you lost $50,000 or gained $200,000? Many of those screaming about the bubble bursting will scream they have lost 50K. I tend to believe that you are fortunate  to have had such great appreciation in your home during that period and should be very thankful.  

The number of homes sold in the state fell to a four-year low in January, the fourth month in a row that annual homes sales have declined. The statewide rate of home price increases peaked in June 2004 at 23.2 percent and has gradually declined ever since.The trend is another sign that the state’s once-sizzling real estate market is cooling, leaving some home-sellers in a bind in the process.”Sellers are becoming nervous about how long it’s taking to sell,” said Aaron Zapata, executive vice president of Century 21 Grisham-Joseph in Whittier, which has offices in the counties of Los Angeles and Orange.”There are many sellers who have contingent offers on properties that they’re having to withdraw because they’re not getting their homes sold,” added Zapata.In all, 38,300 new and resale houses and condominiums were sold statewide last month, a decline of 27.5 percent from 52,800 in December and down 9.5 percent from 42,300 in January 2005, the real estate research firm DataQuick Information Systems reported Thursday. via the AP Wire

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