What I have been doing is much more mundane. I have been working with clients. Since the day after Christmas I have seen a huge surge in the volume of client interest in seeing and buying homes. We are not talking about tire kickers here. My last deal I was in multiple offers. I have colleagues consistently selling homes for 95% or better of list price in less than 30 days.

Most agents that I speak with are having the same experience. Is this a Southern CA phenomena? A Los Angeles phenomena? Will it last?

Well from the recent national stats the sent the stock market down recently it may be a local phenomena.

Make no mistake though, there are individual all over the country we can't handle the most recent adjustment to their adjustable rate mortgage or who have been recently unemployed. The question is, will there be enough of sales caused by these circumstance to put downward pressure on SoCal home prices?

Presently, it looks like the answer is no. SoCal employment is very high and that trend is projected to continue.

What it does mean is that the previous appreciation trend of 20% or more will not return soon and that slower annual appreciation of 3-6% will be near term trend.

It also means that some investors will remain in the market and that others will enter as it becomes appropriate for them to do so. Builder's meanwhile, still have a large inventory overhang and that should keep a lid on appreciation in the short term.

As I have often written, employed homeowners do not just stop making payments and walk away from their homes. Thus, nothing other than rising unemployment is likely to cause home prices to fall significantly further in the Greater Los Angeles area.