Sellers are chopping prices to get deals done. San Diego had the wildest run-up among major California cities, with prices tripling since the mid-1990s. The boom was stoked by cheap loans, changes in tax law, creative financing and a generalized mania that fed upon itself.

The market also began to fade first in San Diego. Most analysts and people in the real estate industry insist it will be mild. The housing bears say the bulls are either misguided, uninformed or shills.

At a Century 21 sales office in the Ocean Beach neighborhood, broker David Davis said the market had already bottomed out. The post-Cold War downturn caused widespread unemployment and a generalized exodus from much of Southern California. High interest rates contributed to the misery.

If Davis radiates cheer, the fliers taped to the window outside the office door tell a different story. "Huge Price Reduction,". In some cases, the prices are dropping faster than the fliers can be reprinted.

A two-bedroom town home has its price of $324,900 crossed out with a marking pen, replaced by $309,900. Another house, a four-bedroom in suburban La Mesa, has a printed price of $575,000.

By Mabelle Sese
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