After several months of encouraging news on the
housing front, California housing prices are in the midst of another downturn,
if not yet a fall.

Housing prices have been steadily dropping since last
spring, after a year of recovery, according to a California composite of the
S&P Case-Shiller U.S. National Home Price Index. More ominous,
year-over-year home prices have been dropping since the beginning of the year,
signaling a return to the persistent price stickiness California has
experienced since the bursting of the mid-decade housing bubble.

California’s data mirrors national trends. According
to David M. Blitzer, chairman of the S&P Index Committee, "There is very
little, if any, good news about housing."

Other indicators of housing activity are mixed.
According to the California Association of Realtors®, the Unsold
Inventory Index for existing, single-family detached homes was 5.3 months in
March, down from 7.3 months in February 2011, but up compared with March 2010’s
4.8-month supply.

escrow sales of existing, single-family detached homes in California totaled a
seasonally adjusted annualized rate of 514,090 units in March, according to
CAR, an increase of 3.1 percent month-over-month and 1.5 percent year-to-year.