Will California Real Estate Escapes Median Home Price Drop?

Today the NAR released it's existing home sales data and nationally prices actually dropped 1.7% from the same month last year. Surprisingly California real estate actually was up a minor 1.6%. The biggest drop happened in the Northeast.

For August, California home sales have actually plunged 30.1% according the the California Assn. of REALTORS, which was the biggest year-over-year drop since August 1982.

As everyone already knows, California has lots of adjustable rate mortgages, many of which will be adjusting in the upcoming year. Will this have a significant effect and possibly cause an uptick in foreclosures which will drag down home prices?

Can the California continue to escape an actual down turn in actual prices or are we just setting up for a serious accident?