A recent report from Santa Barbara. "The housing market in Santa Barbara County has gone from hot to lukewarm, and it's likely to stay on the cool side over the next few years, according to state and local economists. 'The boom is over. But the market won't collapse, and we don't expect home prices to decline," said Mark Schniepp."

"Sales of existing homes countywide fell by about 13 percent last year, the biggest drop since 1995, Mr. Schniepp. On the South Coast, known as one of the most expensive housing markets in the nation, total sales last year also fell in the 13 percent range. And the number of homes available for sale climbed to the highest level since 1998, he added."

"Chris Thornberg, senior economist at the UCLA Anderson Forecast, also presented his real estate projections, which he titled 'Chill in the Air.' 'When you see sales starting to fall, that's the signal of the end (of the boom),' said Mr. Thornberg, who for years has insisted that California was enveloped in a housing bubble."

"Home sales have fallen not only in Santa Barbara County but throughout California. 'In California, there is no growing market except in Riverside,' Mr. Thornberg said."

"But does a peak in sales signal that home prices will fall, and does that mean the housing bubble will burst in the same way as the stock market? No, Mr. Thornberg said. 'You can't day-trade housing like you can stocks,' he explained. 'The bubble pops not on the price side but on the activity side.'"

"Instead of homeowners unloading their properties at fire-sale discounts, most will deal with a soft market by 'going into a bunker mentality.' They'll pull back on selling and buying homes, and they'll stop talking about how much their properties are worth, Mr. Thornberg said."

"Both Mr. Schniepp and Mr. Thornberg said..the fate of 2007 depends on whether the housing market deflates slowly or takes a sharp dive. Santa Barbara County and the rest of California have grown heavily dependent on the real estate sector over the last five years to keep the economy afloat. 'A large portion of employment in the county is real estate-related,' said Mr. Schniepp. 'About 10 percent of all jobs in our area are somehow related to real estate, not counting retail sales for goods that go into houses.'"