Kirk Psenner, an agent with Sotheby's International Realty who sells homes in the Hollywood Hills and adjacent neighborhoods, can see the difference as well. He said that a two-bedroom hillside home in Silver Lake he's had listed at $699,000 for more than three weeks would have received multiple bids in July in its first week on the market. "It's starting to become a buyers market again," Psenner said. "There's no longer this panic-crazy buying."

While the monthly home data suggests that while the housing boom is running out of steam in certain neighborhoods the median price in Westwood was down 1 percent and Pacific Palisades was off 5 percent from a year ago other areas are continuing to see double-digit appreciation.

Rancho Palos Verdes, with the cheapest real estate on the pricey Palos Verdes Peninsula, saw prices rise 66 percent, while San Pedro was up 22 percent and Carson 19 percent.

"A lot of times these guys (sellers) still believe we're in a top rising market, but when they don't get any offers after 30 days they start lowering prices," said Dave Velazquez, a broker at HelpUSell Harbor Homes, which services San Pedro and nearby communities.

Housing experts were making similar observations at the Milken Institute's State of the State conference last week, concluding that California home prices would first flatten and then drop by 1 percent to 15 percent over the next two years. "Prices in California are overvalued by at least 10 percent," said economist Mark Zandi of

Angelo Mozilo, chairman and chief executive of Calabasas-based Countrywide Financial Corp., one of the largest mortgage lenders in the nation, said the reversal would actually benefit the housing industry.

"Too many people are being priced out of the market. We would like to see some leveling off so that people's income levels have a chance to catch up," Mozilo said.

The realtors' association most recent housing affordability study concluded that in Southern California, a family with a median household income of $52,580 would be $74,240 short of the income needed to qualify for a conventional loan to purchase a $541,110 house the association's median for the third quarter.

But panelists at the conference said underlying economic fundamentals, including rising incomes and steady job creation, are still too strong for a market collapse.

Delores Conway, director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate, sees a soft landing for the market. "It's not at all going to be like the early 1990s," said Conway, who disagrees with economists at the UCLA Anderson Forecast, who have repeatedly warned of a housing bubble deflating by double digits in some areas.

Staff reporter Howard Fine contributed to this story.


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