I disagree with Bob on OC prices overall (data analysis on incomes, historical trends in OC housing vs the nation, historical trends on prices during recessions, etc suggest we have some more to lose) but some properties in SA are actually priced close to reasonable right now. It depends what neighborhood and what type of property. Will it go down more? Maybe. Probably. But SA is one of the areas that was hit hard and fast and a lot earlier than most of OC due to a much larger percentage of subprime loans, quite a few of which have already gone bad or are going bad now. there is a TON of inventory in SA and I've seen some properties that are very well priced. Well priced meaning that for the type of person who would want to buy and live in that property and location, they could probably afford it or its getting close. Condos in particular are cheap as hell there (but frequently in bad areas and very run down - you get what you paid for!).
Its true that prices are low and interest rates are low, but savings accounts and 401ks are also low or wiped out, and people are much less willing to sink all their savings into a house in this economy. Also a lot of people have a lot of debt or bad credit. Right now banks aren't lending to people without good credit and a solid downpayment (I'm told 5% down is still a possibility if everything else about you as a borrower and your house as a purchase are EXCELLENT and as long as its a detached home -- otherwise you need at LEAST 10% and good credit...). So basically I do not think there are enough people in this economy who CAN buy -- and because there are not enough buyers the prices are going down more. A low interest rate is nice, but you can always refinance next time the interest rates are low. However if you buy at a higher price, you are locked in at that high price. Just something to think about.