Job creation in CA and nationally is slowing. If this leads job losses then expect the pressure on home prices to deepen.

Wall Street is now pricing in slower growth. Whether this is a mild recession or a large one will in large part depend on the availability and terms of credit and on the willingness of borrower's to take on risk. If credit goes through another round of tightening or if borrower's become more risk adverse then ecomonic conditions will additionally pressure home prices.

A bottom will not form until home sales and home starts stop falling and foreclosure activity stops increasing.

It is unlikely that foreclosure activity will slow until at least the end of spring 2008 when most of the ARM reset are completed.

Thus, the bumping ride continues.