Some housing bubble reports from California. "Home sales in the Bay Area continued to slow last month as prices reached new highs. Prices increased at their slowest pace in more than three years. A total of 9,892 new and resale houses and condos were sold in the nine-county region last month. That was down 24.0 percent from 13,014 for June last year, according to DataQuick Information Systems."

"'The Bay Area's market is reaching the end of a real estate cycle, it looks like prices could flatten out sometime this fall. What happens after that is anyone's guess,' said Marshall Prentice, DataQuick president."

"Home sales in the East Bay plunged in June compared with the year before, and the downturn was the largest annual decline since sales began to droop 18 months ago. Even worse, sales plummeted at a faster rate than the Bay Area overall. Sales fell 27 percent in Alameda County and an even steeper 28 percent in Contra Costa County."

"Ryan and Susannah Maddox have been trying to sell their house in Loma Linda since March. At listing time, the couple realized this was a different market than when they put a deposit on their house in April 2004. 'We knew the market was slowing, but we were hoping it would not take this long to sell,' Susannah Maddox said."

"A UCLA economist said the combination of rapidly falling home sales and diminishing home-price appreciation is the behavior of 'a classic bubble.' He predicts home-price appreciation will flatten out, and there might not be true appreciation again until 2011."

"'The soft-landing people are full of nonsense,' said Christopher Thornberg, senior economist at UCLA. 'This is a classic bubble. And unit sales are falling faster than in past bubbles. Next year will be critical from the standpoint of how the consumer will react to not having 'a house cash machine' that can be tapped for spending thanks to rapidly appreciating value. 'A major pullback in consumer spending could get ugly very quickly,' he said."

"Second-quarter sales of new homes in San Joaquin County were down by 40 percent from a year ago. Builders have reported that aggressive discounting sales and some price cuts in the first half of the year to generate sales."

"A rising supply of unsold homes is helping to put downward pressure on prices. One local MLS that covers metropolitan Los Angeles sent a letter to its broker-clients this month saying it had more homes listed than at any time in its history, about 13,000 properties."

"'It's definitely a buyer's market, but there are plenty of scared buyers too,' said John Rygiol, a Seal Beach-based agent who works exclusively with home buyers. 'That's the really weird thing right now, the uncertainty. Buyers are hesitant to buy because they think prices will drop.'"

"Sales have declined three consecutive months in Riverside County and six consecutive months in San Bernardino County. Economist Chris Thornberg argued that an extended holding pattern for would create tremendous pain for the real estate industry. 'The builders and mortgage brokers and real estate agents will take a hit,' he said. Thornberg said Southern California home prices are easily 40 percent overvalued and it will take about six years for incomes and other economic factors to catch up."

"Consultant Steve Johnson said a sales slowdown shows that consumers are confused about whether this is a good time to buy. 'They are being very cautious,' Johnson said. Johnson said the frenzy of home purchasing over the last several years also may have 'stolen demand from the future' while pricing many out of the market. Johnson said builders 'are in for a significant period of adjustment over the next 18 months. We have the wrong products built in the wrong locations and at the wrong price for this market.'"

"For the first time since the late 1990s, median sales prices for homes in Placer and Sacramento counties dipped below the previous year's levels. Real estate agents attributed Placer County's bigger drop to price cuts on higher-end homes and a rash of condo conversions in Rocklin and Roseville."

"'This is showing all the earmarks of a real estate cycle that's reaching its end,' explained DataQuick analyst John Karevoll. 'The big question: Is it going to reach its end with a splat or reach the end with a relatively soft landing?'"

In San Diego. "Brokerage firm Marcus & Millichap holds that in San Diego County, 25 percent to 40 percent of condos under development or apartments that were converted into condos will return to the rental marketplace over the next 18 months, spokeswoman Stacey Corso said. She said the forecast also applies to Las Vegas, Phoenix, Washington, D.C., and much of Florida. 'It is already beginning to happen,' said Kent Williams."

"Real-estate consultant Gary London said the condo conversion market had made 'a major shift.' 'It is froth, with distressed properties, with condo conversion maps with no chance of selling at the prices they need to sell to be made whole,' he said."