As previously mentioned, we are certainly still seeing multiple offers in many parts of Berkeley and Albany. I also agree that a trip back would be beneficial as I think you will have some options worth pursuing. Are you willing to look at something requiring a little work? Are you willing to look at short sales (this is when an owner owes more than the property is worth)? Foreclosures? Albany and Berkeley aren't seeing high levels of foreclosures at this time, but I have heard some forecasters say that the rate of foreclosures throughout the Bay Area is expected to double by next Spring, and double again by the Fall...could be some opportunities out there. Finally, are you willing to venture just outside of the Berkeley/Albany lines? There are some fantastic 2 bedroom homes in El Cerrito and the Richmond Annex where you can walk to BART, shopping, coffee, etc. Regardless of whether you buy in Albany, Berkeley, or elsewhere, you should have some options on the loan side (I just had a client purchase a wonderful home with only 3% down) so you will want to be sure to talk to a qualified mortgage broker.
Hope this is helpful! Best of luck with your search.