From CNN MOney

But there are signs that California’s housing market may be coming out of this tailspin: Sales volume is increasing, investors are returning and inventory is shrinking

Bottom line is the areas that harbored the housing mess is cleaning itself up:
February saw buyers buy more than 600,000 homes, some 80% more than they bought in February 2007, according to CAR.

John Dugan of San Francisco is using his IRA to purchase homes in Sacramento. The salesman is using a portion of his Entrust Group-managed IRA to buy townhouses in the Sacramento area.

So far he’s purchased three 840-square-foot, two-bedroom, one-bath duplexes. He paid just $35,000 to $80,000 a piece – down from their $180,000 to $200,000 selling prices a few years ago.

“This kind of pricing is something you only think of as Midwestern, not Californian,” he said.

Leslie Aplleton Young of NAR is calling the market as normalized fitting in with the rest of the nations home supply which runs at 9.7 months.