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Hey, what's going on?

We have experienced a some major increases in the real estate market of the last few years.  Recently, it appears to have slowed drastically and in some areas even stopped. What is going to happen next?

In the 90's southern California saw declines in the market of approximately 20%, overall. Will it be the same this time or can real estate continue to increase in value?

I think that a major downturn in the market is inevitable.  We are seeing increases in inventory, both new construction and resales on the market. We are also starting to see those TV adds for real estate auctions of foreclosures. Foreclosures are definitely on the rise.

What about those people who bought those large homes with interest only loans?  Will this add to the foreclosures? Many of these people had loans all due in 3 to 5 years. Many were told that the market would increase enough for them to refinance out of the interest only loans.  It does not appear that this has happened for many of them and interest rates have increased.

It appears that the interest only loans, population increases and the actions of the real estate industry,  as a whole, will make an upcoming downturn in the market more severe.

Let me know your ideas and thoughts.