The Sacramento Bee has the latest on that housing bubble. "In another sign of a cooling market, existing homes sales in the capital region declined last month to the lowest level in six years. Sales in January fell a combined 29 percent in Sacramento, Placer, El Dorado and Yolo counties compared with the same month a year ago."

"At the same time, the median sales price, the point where half of the homes sold for more and half for less, dropped for the fifth straight month in Sacramento County to $352,500, a 5.2 percent decline from an August peak of $372,000."

"The chill also was felt in Placer, El Dorado and Yolo counties, where price appreciation slowed dramatically from the 20-plus percent gains seen over the past few years. 'Right now, we're in a downshifting to a normal..time. It's not unraveling,' said Sean Snaith, director of the University of the Pacific's Business Forecasting Center in Stockton. If interest rates jump, inflation flares up or unemployment spikes, 'then we're talking a different story,' he said."

"'The buyers definitely have the upper hand right now,' said (realtor) Pam Petterle. 'Buyers are coming in now with lower offers.'"

"In recent years, a buying frenzy sparked by low interest rates and bidding wars drove resale prices to record highs. It wasn't unusual for some homes to sell for more than the asking price. The roles are now reversed. 'The sellers are no longer calling the shots,' said John Karevoll."

"The biggest impact has come in the high-end market, where homes priced over $500,000 are taking much longer to sell and sellers are forced to lower prices or pull houses off the market. 'These $900,000 to $1 million McMansions really become less affordable,' said Snaith. 'We're observing more softness in the high end.'"

"Along with January's sales drop, the number of houses listed for sale in the four-county region rose to 9,267, up 8 percent from December. That was more than 2 1/2 times higher than a year ago. nventory of homes for sale had slipped in November and December last year after hitting a peak of 10,801 in October. The inventory last month was the highest for a January since 1995."

"It continues to grow this month. Through Thursday, the number of homes listed for sale in the region was 9,543. Last month, the capital area recorded 1,678 sales of existing homes, down 30 percent from December. Statewide, homes sales hit a four-year low in January, marking the fourth consecutive monthly decline. Overall, 38,300 new and resale homes were sold, a 27.5 percent drop from December. The median price of a home in California in January was $452,000, down 1.3 percent from the previous month."