I don't think property values anywhere near the California coast will go down anytime soon, again barring some major outside force intervening, i.e. terrorism, depression, etc. Coastal California is one of the nicest places in the world to live and as I think Will Rogers said, "they're not making any more of it."
I think you could probably go up and down the coast from Sonoma County to the Mexican border and not find more than a few acres here and there of developable land within 10 miles of the coast. The vast majority is either already developed or permanently set aside as parks, open space, wildlife, etc.
Southern California is looking at the somewhat odd situation of demand being driven by internal population pressures -- people are having a lot of kids and they need housing, but it's not being built.
I think it will of course slow down as interest rates start to edge up, but that won't do you any good as a house hunter, because you could still get priced out by not being able to qualify based on a your income for the higher monthly payments. I say if you have the dough and you find a place that you like and that you can afford, just buy it.
