Markets such as Vallejo may very well have bottomed, but the Castro Valley market very likely has not.
In the run up to the bubble (2004 - 2006), most folks who bought out that way did so using exotic loan products that had low payments for the first five years (e.g. option ARMS). When those loans recast in 2010 and 2011, the owners will find themselves holding mortgages that are significantly higher than the current market value of their home.
When the Option ARMs recast, it's not uncommon for the mortgage payment to triple. So you have the potential for a fairly sizable market of folks whose homes are worth far less than their mortgage balance and who are facing payment increases of up to 3x their current payment. Since these are generally conforming jumbo loans, they do not qualify for the mortgage adjustment/relief programs that banks are offering for conforming loans.
You can find more info on this issue here:
Most analysts expect the wave will crash in reverse of how it was created. The last wave of Option ARMs were written in the far East Bay (San Ramon, Dublin Ranch), so if the predictions are true, those areas should correct first, followed by Castro Valley / Five Canyons, and moving Westward towards the coast and up the Peninsula. Note that trend is real, as Windemere and Dublin Ranch are experiencing the predicted effects; short sales and foreclosures dominate the mid high range in those markets.
Lastly, don't believe the realtor hype. Do your own research. And check the redfin.com forums, as they block any realtor advertising and tend to attract folks like yourself, who just want unbiased analysis and information without the RE sales pitch.