I believe that 2013's gains in many areas of CA will prove unsustainable. Yes, we may see increases that are more tempered, but overall, I think that buyers and sellers need to be aware of the fact that higher rates, more restrictive access to credit (thanks to the Dodd-Frank regulations taking affect in two weeks) and Washington's continued but confused assault on Fannie Mae, Freddie Mac and the FHA won't help.
Buyers tend to exhibit a herd mentality. They buy when others buy, and not when prices are on the way down. This is not necessarily their fault, but we have to expect that if sentiment changes because of any or all of the above, it's realistic to assume that appreciation rates would cease to move at the same clip.