I am an optimist so I do not think it will be as horrendous as some of the doomsayers on this board are predicting but I must admit I am not quite as optimistic as I was 4-6 months ago.
1. It was interesting to move here from the East Coast. When I moved here, the media was making so much about declining housing prices while prices were still accelerating in parts of LA. E.g., Boston started seeing a decline in 2005, while we were seeing continued acceleration on the West side of L.A. until late 2007. So now parts of the East Coast are leveling out (and some areas are recovering) while L.A. is still playing catchup.
2. Because L.A. has experienced such a bigger run-up in prices over the past 7-8 years than other parts of the country, it will take longer for our market to achieve stability.
3. L.A. is so large that it is like a microcosm of the rest of the US. That is, some parts of L.A. are much harder hit than others. E.g., in-land areas which are further away from L.A are going to suffer more than areas near the ocean.
John will be hopping in here in a moment to tell you that he has the inside track on the future. He will tell you that the 2nd greatest depression is coming.
As an agent that doesn't work in the area, I don't have an opinion on the matter. I would also caution you to be leary of the advice you get here. The reality is that nobody knows. Markets are too dynamic for any person to be able to make anything more than a guess.