Um, we share the status of extremely high default and foreclosure rates with San Joaquin and Merced counties. Banks own many properties in our area. The forecast for March includes a wave of adjustable rate mortgages to adjust upward and price many owners out of the market. This will continue to increase inventory and drive prices downward for another 6-12 months. However, interest rates are low, and if you plan to buy, fix, and hold, you will do very well in 5-7 years.
The Market has definitely shifted to a buyer's market in Modesto. Prices definitely aren't crashing, but if you're pre-approved with a lender and ready to close in 30 days you should be able to negotiate a great value.