Isn't the decline in the valuation of the properties due to unrealistic current valuations and also due to unsustainable growth in valuation numbers? I know that the home I occupy would be worth 2-3 times its value if it were in the LA area. To me those house prices are insane when compared to household income. I would think that most of the price run up in California and Florida was due to expected increase in valuations(speculation) so the buyers could flip them or get a HELOC.
In the rust belt areas the problem is layoffs. There are less people to buy more properties. Less demand, more supply.