The real estate market began crashing in 2006, and the downturn lasted about 3-4 years. After all was said and done, property values declined anywhere from 25-65%, depending upon the area.
The hardest hit areas were the inner cities and outlying desert communities where sub-prime lending ran rampant. What followed was a tremendous wave of bank foreclosures and homeowners with upside down mortgages. Consequently, the market became saturated with REOs and short sales after a few years into the crash. These distressed sales became the predominant influence in the market. Declining property values of about 50-65% below the 2006 peak were common in these areas. There has been some recovery in the past couple of years, but values are still anywhere from 30-50% off from the market highs.
The majority of the southern California real estate market are suburban middle-class neighborhoods. These areas also took somewhat of a beating, but have made a decent recovery in the past few years. In general from what I have seen, prices are still about 25% off the peak highs. This is where I agree with the article. It seems to be relative to suburban middle-class neighborhoods in southern California.
By contrast, I noticed that housing values in some of the local beach city communities where I work were hit only modestly by the market downturn. In some cases (such as Manhattan Beach), the housing market has not only caught up, but even surpassed the peak levels from eight years ago.
Based on my experience and observations, that old adage seems to once again ring true: The three most important factors in real estate......location, location and location.