A pair of reports on the California housing bubble. "Bay Area home values are expected to decline next year because of rising interest rates, a glut of homes on the market and lower affordability levels, a housing economist said Thursday. 'We're not talking about massive house price declines but giving up some of the gain we've had' of the last few years, Ken Rosen, chair of the University of California, Berkeley's Fisher Center for Real Estate & Urban Economics.'"

"In coming up with his outlook for next year, Rosen cited an increase in the number of homes on the market as measured by what's known as the unsold inventory index. 'The decline (in home price appreciation) will happen because unsold inventory is getting so high,' he said. Housing prices have risen dramatically relative to income. 'Low interest rates and easy credit is what caused housing prices, relative to income, to rise so fast,' Rosen said."

"'Inventory has increased dramatically over the last couple months. It is now in the normal range,' California Association of Realtors chief economist LeslieAppleton-Young said. 'Only one factor can lead to a significant decline in prices, and it's too much inventory.'"

The Sacramento Bee. "Sales of existing homes in the Sacramento area jumped sharply in March from February levels, but the 2,489 homes sold across the four counties were still the lowest for a March since 1999. In El Dorado, Placer, Sacramento and Yolo counties. But home buying still was off 29.5 percent in March 2006 compared with the same month in 2005."

"A closer look at the region's performance shows: Sacramento County, with a $359,000 median sales price in March remains below the August peak of $372,000. (In) Yolo County prices fell to $410,000 from February's $421,500. The county's median sales price remains below its November peak of $436,500."

"El Dorado County posted its third straight monthly gain, reaching a median sales price of $451,00, highest since December's $455,000. The county remains below its September high of $475,000. Placer County, too, showed gains for a third straight month, with median sales prices of $477,000. That's the highest since December's $485,000, but still below August's $502,000."

"The number of homes for sale in the four-county region continued to swell in March, reaching 10,316 compared with 3,799 at the same time in 2005."

"'My guys are telling me we are building 30 to 40 new signs a day,' said Jim Eggleston, owner of a Sacramento firm that builds front yard 'For Sale' signposts for the region's real estate listings. 'Where it's going is the big question,' Eggleston said. 'Are we going to reach 15,000? Are we going to reach 20,000? I don't know.'"