Real estate in California has been going up and down for ages. However, this time it has gone up so high that even the experts were amazed. Now it is on its way down and people who planned to sell for some time are in a mess. They were being greedy and wanted to wait until the last minute. Now it is too late.

Buyers got into the market with zero down and up to 125% loans. Some of them went in with interest only loans, which means for a certain time their payments would pay off only the interest on your loan and there would be a balloon payment at the end of that period. The anticipation was that before the end of that period they could refinance and everything would turn out fine. They did not take into account that the market might go down, overturning their whole world.
Maybe this will serve as a lesson, but the people who have suffered now will not be the same people making the mistake the next time around. We have been going around in circles for a long time and every new generation makes the same mistake repeatedly.