La Costa is generally stable, especially for homes in South La Costa that are in the Encinitas and San Dieguito school districts.
Short sales are starting to appear, though, in homes bought or refinanced with marginal financing in 2005-2006.
To see real time market stats for the La Costa area, just click the link below:
People who choose luxury homes generally seem to be better off than the huddled masses. Obvious, but I mean that they tend to have resources far beyond what they might need in an economic downturn. Additionally, they generally have fixed-rate mortgages at low interest rates. If they choose to sell they don't have to desperately grab the first offer, they don't have to compete with foreclosed homes in the neighborhood. Finally, I believe there is more demand for high-end homes than low. Low end buyers are waiting for still lower prices.
I don't expect a significant decline in La Costa.