Reuters found the inventory statistics that the CAR economist couldn't. "California had more unsold homes in February than at any other time in the past eight years, as sales of existing houses slowed further with rising mortgage rates and high prices. The inventory of unsold homes rose to a 6.7-month supply last month, said the California Association of Realtors.'"

"'There are a lot of people who can't afford to buy at today's prices,' said John Burns, an Irvine, California-based consultant to home builders. 'It looks to me like the market is headed for a soft landing.'"

"Existing-home sales in California last month dropped 15.5 percent from a year earlier, marking the fifth consecutive month of year-over-year declines, according to the report. February's median price for an existing, detached single-family home for sale in California slipped 2.9 percent from January."

"California's housing market is slowing not only because buyers face big downpayments and rising mortgage rates, but also because sellers are holding out for top dollar and are willing to let homes stay on the market for longer times, said Leslie Appleton-Young, chief economist for CAR. 'Sellers are not eager to sell,' Appleton-Young said. 'You have a marketplace where you had a surge in listings over the fourth quarter where sellers didn't want to miss an opportunity.'"

And Inman News has this on the borrowing front. "The use of adjustable-rate mortgages for home purchases has declined significantly in California during the past three months, the result of more caution among buyers and lenders. The use of ARMs, which are easier to get and are considered by many to be an indication that buyers are stretching their finances, fell to 51.9 percent in February. This was down from 63.7 percent in January, 68.7 percent in December and 70.9 percent in November, according to DataQuick."

"ARM usage peaked in May last year at 73.7 percent, up from the prior real estate cycle in September 1988 when ARMs accounted for 66.1 percent of all home purchase loans. 'Some of the financing issues at play here..include this year's higher conforming loan limit, the spread between the cost of an ARM and a fixed-rate mortgage, use of equity lines, and federal regulators who have recently told lenders to lower risk levels,' said Marshall Prentice."

"'It's a lot easier to loan somebody money when the collateral is going up in value at more than 20 percent a year than when values are going up at half that rate. What we have here is a market cycle that has passed its frenzy phase and is moving into more balanced territory,' Prentice said."

"The use of so-called exotic mortgages is plummeting in California as home buyers become less willing to use the riskier loans and lenders seem less eager to issue them. Some observers believe a reduction in adjustable-rate mortgages could exacerbate the housing slowdown, since the tool is widely credited with helping marginal buyers purchase a home, especially in a high-priced market like the East Bay."

"Another report released Thursday noted that 'slam-dunk' loans, those approved with a minimum of scrutiny, are also falling in California. The percentage of such loans dropped from 83.8 percent of the total between March and August 2005 to 79.6 percent from September to February. In the East Bay, the rate dropped from 84.5 percent to 81.8 percent."

"'The adjustable-rate mortgages aren't attractive anymore,' said Stephen Levy, economist in Palo Alto. He believes this waning allure is a big reason why the market has slowed as much as it has already. Across the nine-county region, home sales fell 16.8 percent year-over-year in February."

"'I think it's a very good thing,' said Edward Leamer, director of UCLA Anderson Forecast. 'I never understood why (Federal Reserve Chairman Alan) Greenspan was encouraging people to go into short-term mortgages, because of the risk they entailed.'"