That's because Westside prices, Kleiman said, are still above what incomes can realistically support.

"When I moved here in 1995, I could afford the house I bought," he said. Now, even though prices have come down, Kleiman said he couldn't afford houses near UCLA on his salary, unless he made an unusually large down payment.

Some people who had been saving for years may be doing just that; others have taken advantage of recent record-low interest rates. That could be putting a floor under home prices.

Still, Kleiman thinks "we may not necessarily be at a natural bottom," because "I still think houses in Los Angeles are expensive on an absolute basis." The "natural bottom" would be the level at which homes would be affordable to people with a down payment of about 20% and fixed monthly payments that could be sustained on their incomes. The Westside is not close to that level yet, Kleiman said.

Kleiman and Kiesel may be more likely to wait because they live in markets far pricier than Baker, who paid $650,000 for his three-bedroom, 1,500-square-foot Washington house.

In Southern California, sales are brisk for homes priced near or below the current $265,000 median. The majority of those homes are foreclosures, so prices are often low enough to draw multiple offers from potential buyers.

Richard Toscano, who in 2004 started a popular San Diego housing-bubble blog called Piggington's Econo-Almanac, lately has been posting data showing home prices are favorable compared with incomes and rents in lower-priced parts of San Diego.

He's drawn fire from some, but others who have followed the blog for years have recently posted comments detailing home purchases. Toscano, who sold his San Diego condominium in 2002 (he said the sale was due more to a job transfer than his belief in a bubble then), is still holding off on buying for various personal reasons, he said.

But he thinks it's no longer dangerous to buy in some areas.

"We have this weird, disparate bottoming," he said. "In some areas we may be there already, but others are not nearly as close."

Kiesel thinks places such as his home turf in Newport Beach are among those headed for steeper price drops. Interest rates for jumbo mortgages are still relatively high, and lenders are routinely requiring 35% down payments on loans greater than $729,000, limiting the pool of people who can afford homes in the millions of dollars, he said.

Kiesel didn't want to talk about the price details of his own home sale and purchase, but said that when he buys again, he will require jumbo financing.

In that segment, Kiesel said, demand is low because few people have the income and savings to afford the high prices and obtain loans. Supply will grow, he said, as owners of expensive homes purchased during the bubble years find they must sell at a loss or be foreclosed on.

Although widespread foreclosures have brought prices down in lower-priced areas, more affluent homeowners have been able to avoid defaulting on mortgages thus far.

That's about to change, Kiesel says, because falling property values are putting more wealthy homeowners underwater, where the value of the home is less than the mortgage. He estimates 35% to 40% of homeowners nationwide will, by the end of next year, owe more on their homes than the properties are worth.

As prices continue to fall at the high end and those homeowners get deeper underwater, they'll have to sell at prices well below today's levels, or get foreclosed on, which will result in the homes being resold by lenders at cut rates.

Meanwhile, rents are falling. Kiesel's rent hasn't increased and others in his building have gotten rent reductions recently, Kiesel said.

The house Kiesel sold in 2006 has been back on the market for about six months, he said. Would he buy it back?

Only if the owner "would sell it to me for 50 cents on the dollar," Kiesel said.

He doesn't expect that to happen soon.

peter.hong@latimes.com