Some outlying areas of SoCal down to 1989 price levels

There's an interesting story in the L.A. Times about prices in certain outlying submarkets -- such as Lancaster/Palmdale or Hemet/San Jacinto -- falling to levels not seen since 1989 (and that's not even adjusting for inflation). Although many investors have been swarming into flip for a quick profit, those who bought a year ago have still taken about a 10% haircut, and more price declines may follow as the second and third waves of foreclosures (related to Option ARM re-sets and job losses) take hold later this year. In some cases, however, these prices are so low that if your home caught fire and you had to re-build, you'd pay twice as much. From the story:

Properties in several areas are selling for less than they did 20 years ago, and that's not even counting the effects of inflation.

The reversal is a bonanza for some first-time buyers. They're nabbing houses for less than what their parents paid in the late 1980s, jumping into a real estate market that has become a kind of economic time machine...

Home prices across most of Southern California have not fallen nearly as far. The median price in the six-county area was $247,000 in April, about what it was in 2002.

But in 14 Southland ZIP Codes, mainly desert communities in the Antelope Valley and Inland Empire, median prices have fallen below levels recorded in April 1989, according to MDA DataQuick, a San Diego real estate information service.

That means thousands of homes in those neighborhoods -- even houses barely 20 years old and in decent shape -- have lost every dime of their appreciation, giving back not just the gains of the recent bubble but steady increases logged over a generation...

Prices also tumbled below 1989 levels in neighborhoods in Palmdale, Hemet, Barstow, Desert Hot Springs, Victorville, Highland, Santa Ana and Oxnard, according to DataQuick. Several other inland communities, including parts of Moreno Valley, Banning and Rialto, had median prices that were only slightly above 1989 levels and below the April 1990 median...