I would think with the current out of control gang problems, it probably won't improve until there is some solution. I know the current advice is "Stay away from Salinas!".

I would say it is a great time to buy. The tax credit has been extended and interest rates are still low. That is if you plan on staying in the home for the next 7 to 10 years (maybe even longer.) It is my opinion that we are going to be in this market for a long time and equity is going to be slow in coming.
There are several reasons why I feel this way.
Banks are trying to modify loans but statistics tell us that almost 70% of those who modify their loan will end up losing their home anyway. The biggest part of that problem is that loan modifications generally are not for the life of the loan. Most will require that the homeowner re-fi at some point. In some cases the reduced payment is only for a limited time. If a homeowner owes 2 times more than what their house is worth, they won’t be able to re-finance for a very long time. At some point they will either lose the home or have to short sale it.
The other problem with a modification is it is difficult to continue to pay on a home that is not an asset, but is a liability. A lot of people are going to come to the realization that it just isn’t worth continuing to pay when they know they can short sale their home and be in a new home, with an opportunity to grow equity, 2 years after a short sale.
Then there are the loans that were taken out between 2002 and 2006 that are five or ten year interest only loans. Those loans are just barely starting to become a part of the problem because they are starting to come due and the homeowners cannot re-fi because they owe so much more than their home is worth.
Adding to the problem, banks are holding on to non-performing assets in an effort to control the market. The less REO’s on the market the higher the demand is for what is available. That helps keep prices from falling further but lengthens the time we have to spend in this REO and short sale dominated market.
Because of the reasons listed above equity will be slow in coming for the next several years. So if you don’t plan on staying in the home for several years it probably is not a good time to buy. But as I said in the beginning, if you are planning to stay in the home it is a great time to buy. Take advantage of the tax credit and lower interest rates.