I thought I would turn the discussion "inwards" on the posters on these forums and at least make some guesses on which posters are potential shills for the RE profession.  I am not a big fan of McCarthy-esque exposes but sometime you have to separate the "wheat from the chaff.
My first guess is "charlesriver," a poster on the Avenue One forum…
Bring it on!

I suspect you are right. It is possible he was simply parroting what he heard a real estate agent say, so I tried to give him the benefit of doubt.

OK, in the interest of being "fair," here’s another post on the Watermarke forum that he (she?) started a few days ago:

"thanks a lot! The things is we have  a big house an hour away from Irvine, which is too far away from where we works. After driving a year, feel like it’s really a waste of time. We like our house (large part of the reason being we would pay double price to get a similar one in Irvine), so we don’t want to sell it. That’s why we want to find some small place to live during the weekend.  economially renting probably be better, but emotionally my husband couldn’t stand the idea that we have a house and we pay rent again."

This goes to show that she might not be a RE shill (reasonable doubt).  But the post does look a little dubious, agree?
Alright, who’s next?

Added IRVINITEEEE  to this list…  Better watch out.

Man, nothing good goes without some people trying to screw it up!

-bix

WHY DOES EVERYONE THINK I AM A TROLL ?! HOW CAN I PROVE IT ? I HAVE ANSWERED ALL YOUR QUESTIONS !

IRVINITEEEE,

I think your initial exuberance when you started posting seemed a bit like a realtor trying to sell product. Very few people at this board are going to buy anytime soon because there is a shared consensus that housing prices are too high and likely to fall. People who pump the market stand out here, and REIC trolls are wasting their time trying, and they waste our time when we have to read their drivel.

OK. maybe i shouldnt be as enthusiastic ?

"OK. maybe i shouldnt be as enthusiastic ?"
That’s what you can suggest to your sales manager the next time there’s a meeting called discuss "non-traditional" techniques to drum up business and get the good word out about how now is a good time to purchase.
SCHB

Sales manager ? I’m not even a sales person.

This is what I don’t get: When a "poster" has finally bit-the-bullet and purchased a home, aside from a recap of their experiences, negotiating, prices, etc., I’m not sure what they are still doing following a forum that describes the difficulties of the housing market.  The participants of this forum are transient in nature, because the forum only exists to provide information to people that have yet to make a decision - so that they can hopefully, make an informed decision.  Continuous and subsequent justification after making a decision really does lend support to the "troll theory."  Anyhow, MSNBC’s news ticker just said something about 2006 home sales as hitting a 16 year low?!  Hmm, could that be another sign of inflated markets?
Side note: I am hoping for an rate increase from the fed.

GrewUpInIrvine: "Side note: I am hoping for an rate increase from the fed."
Attaboy!  Man after my own heart!  I can’t wait for banks to charge more interest on loans so that they can pay me even higher cash interest on savings.
Any other trolls out there?

Fed meets when?  End of the month?  Come on 5.50%!  Woo-hoo!
While everyone is making their Superbowl plans, I’ll be counting my t-bills and rooting for 5.75% next month.
 

I think there are some people on this forum that are somewhat in the middle and are researching it.  So…to that extent, I think it’s informative for those of us who did buy and who do believe prices will continue to go up as the rich get richer and the poorer get poorer in OC and other places and to share our thoughts on why.

"those of us who did buy and who do believe prices will continue to go up as the rich get richer and the poorer get poorer in OC and other places"

This is one of the reasons people will enjoy the coming price declines. The smug elitism of this statement brings out the schadenfreude in the lower classes.

2 edits later ...
Look, we’ve had some good and informative discussions over the past few weeks.
Sometimes the smug elitism of the permabears gets a little overbearing too. (Watch and wait and when the market crashes, haha I told you so)
We’ve all agreed no one here is trying to make a quick buck flipping their homes. (right?)
The stats are out there. Listings are high. Foreclosures have skyrocketed. People who got into "stupid" loans are beginning to pay for their greed. Falling knives caught. Prices dropping. I actually have the blogs to thank for discovering how much idiocy and fraud is being committed out there in the RE world.
The purpose of the forum is to provide information - on prices of homes, on quality of lenders, on the neighorhoods in question, and also on statistics - to educate those trying to make up their mind. And from what I can tell, it has helped quite a few people who are (were) on the fence.
However,
People who have made their mind to buy, will buy. They don’t need someone to bash them for being such an idiot to buy a home and throw away their money.
People who have made up their mind to rent, will rent. They too, don’t need someone to bash them for being an idiot to sit the market out.
That’s (hopefully) not what the forum is about. Can we be civil to one another and not assail each other’s intelligences? This is beginning to look like a Democrat vs Republican debate, or an Atheist vs Christian debate. Those who have already made up their minds will only agree to disagree. Let’s stick to the facts. Please.

Fraychielle:
I think we mean well.  Personally, I am trying to reason with people who are going headlong into the most expensive venture of their lives without giving adequate consideration to "rational thought".  This is not a soapbox for me.  This is a "bully pulpit" in the truest sense of the phrase.  By "converting" or convincing one more individual to not make financially disastrous decision to buy a home in the current market, I believe I am doing good in a society gone stir crazy about homeownership regardless of the stakes, and without paying any heed to consequences for most people not in one of the categories you describe (the vultures, flippers, foreclosures, panic sellers etc.).
Look, almost everyone I have met, including the worst of the permabears, are bullish on housing in the long term.  They are just  irked about the disconnect between current prices and reality, and have turned into cheerleaders for a fall in prices from current levels.
So in answer to your missive, the facts are this: Anyone who is buying today will be burned by falling prices for certain- IF he or she is impacted by a very possible recession later this year.  This is a very likely scenario for anybody who works in industries that heavily depend on "consumer sentiment", or anyone who is fortunate enough to work in an industry which directly depends on the RE industry (including builders).  So you may have people who have secure enough jobs (in the gov’t for example) that maybe in shape to ride out the decline, but a vast majority of people do not know, are completely clueless about what the possible impact might be of this decline.
Consider this example to clarify my thoughts:
Most people who are considering a purchase are still looking at 80 + 20 financing (i.e. 100% financing with 80% conforming loan + 20% with a mix of I/O and other ARM or balloon type loans).  Let’s say our friend CK likes a house and agrees to buy it for $700,000 today.  He is 100% financed, with money enough probably just to take care of the closing costs.  His monthly payments will look approximately look as follows:
P&I on Loan #1 - 80%: $3,700
Loan #2: 10.5% amort over 30 years, balloon due at year 10: $1,300
Effective Taxes @ 1.8%: $1,050.
HOA etc: $250
Total monthly recurring obligation: $6,300.
Most likely he and and his spouse make enough to cover their monthly obligations.  Keep in mind that the rent on such a new townhome or yardless SFR at VoC is probably going to be no more than $3,000/ month.
If the property declines 10% in value (a conservative estimate), it will be worth $630,000 in January 2008.  If CK or his spouse (heaven forbid) loses a job because of one of the reasons mentioned above, and therefore may not be able to make their monthly obligation and may have to sell.  (Keep in mind that a $3000 rent of it increased by 10% (unlikely but possible) would still be $3300.  Not enough to rent it out and stay cashflow positive.)
So the option is to either (a) sell this house and pay off the loans, or (b) foreclose/default on the loan.  If chosen to sell, the damage is obvious, it would be around -$70,000 price drop -6% selling cost, + any principal paid in 12 months or a total of approximately $105,000.
If you are in a postion to ride out such a scenario, more power to you.  Most people are still grappling with the affordability gap and are trying their best to make enough to "qualify" to own a $700k house, but just barely.  The cash cushion in just not there.  How many people do you know who will confidently say: my monthly expenses are $6300 for housing, + $4000 for the rest, and I have 12 months cash cushion, i.e. $120,000 in the bank?

I agree with the notion that posts on these forums should be civil and factual.  I do think however, that many members wonder about the authenticity of certain participants.  One thing is certain, it is less likely that a housing bear is mascarading on this forum than a housing bull.

Crucialtaunt:  Well, you definitely nailed down our situation well.  Good incomes, enough cash on hand to cover closing costs and maybe 5% down (so yes, save the cash and go 100% financing). Your monthly outlay analysis looks very similar to my own. At worst, I am expecting $2500 when we renew April 1.
Your only flaw is in the estimate for monthly rent.  Last March we lucked into a 3/2.5 townhome in an IAC complex in Westpark for only $2280/mo - with a whopping $200 security deposit cash outlay.  Our unit was completely renovated/updated immediately before our move in…Everything inside was brand new with all the requisite granite in kitchen and baths (and FP mantle), wood laminate on ground floor, brand new appliances, etc—- Looks as good inside as most of what we see in Northpark. 
My point is that while yes, it flat out sucks that two accounting professionals making north of $175K live in an "apartment", now is not the right time.  We REALLY want and are ready for a home right now. That said, the homes we WANT list for at least $900K right now.  What we can GET in our comfort zone of $700 - $750K is not a whole heck of a lot better than what I describe above….And for at least $3500 more a month?  No way.  As I read what I just typed, I cannot believe that I had myself talked into the fact that I needed to jump into this market—- and came really close to doing so.  Whew.
Unfortunately for us, we were in heavy relocation mode when this boom happened (4 moves between 2001 -2006), so buying was not much of an option.  Now that we are really ready….well, you know.  Such is life.  Reading this forum has really helped put it into perspective for me….Thanks to all for your insight. 
So it looks like one more year of calling the maintenance guy every time a kitchen light burns out….that’s no so bad, after all.
 

...

CK- I stand corrected on the rent.  My assumption was $3,000, whereas, you are correct, the reality is the average rental for 3BR/2BA TH/SFR in Irvine is around $2,300 - $2,500.  So my calculation was erring a bit on the side of caution… It makes the comparison even more heavily weighted towards waiting it out and renting in this market.  Welcome to Waitwatchers!

I’d like to thank everyone who posts so much useful info. I’m 29 and getting married this summer. My fiance and I would absolutely love to live in irvine. If you would have asked us 4 months ago what our plan was for our living arrangements, we’d have both said buying a home, preferrably in irvine, but definitely OC. After a couple months of looking at lots of new homes, i got this feeling that the prices justed seemed so out of whack with the product being offered. Not that there weren’t some good homes, but the concept that $600K equated to the matchbox slums of irvine forced me to start doing some research. I mean, like many people on here, we know we can afford more house than that and would splurge if we found something we loved, but we’d rather not. Thru my exploration, I came across zovall’s wonderful website and have learned so much along with learning from the many people in these forums which are awesome. My lady has trusted me to take the lead on this subject and although its so hard to for her to swallow that a young couple of two fairly successful people "aren’t Irvine material", i’ve been able to convince her its a matter of intelligence and making the right decision for the long term. My soon-to-be-wife wants to own, more than anything based on lifelong dreams of moving into a new home with her new husband and starting her new life. I feel terrible i can’t deliver that dream for her, at least not in irvine. But at the same time, i find a lot of comfort in knowing that there is so much information which supports waiting to buy as being the "right" thing to do as a responsible consumer who respects himself and the hard-earned money he and his wife work for. All that being said, while we haven’t completely closed the door on buying this summer, lately we’ve definitely been concentrating on looking at rentals.

WantToLiveInIrvine: Welcome.  You have come with the right mindset.  There is a time and a place to buy.  Irvine is definitely one of the best places around for young families, no doubt about that.  However, this is definitely not the time.  Wait it out and the world will be yours…  Good luck and congratulations on your wedding!

crucialtaunt: What is the point of your example of a couple buying the $700K home? Are you talking about affordability? If so, a couple having half the income buying a $350K home would be in the same bad situation if there was a job loss. So the price of homes going down would not solve this!

rickhunter: What is the point of your example of a couple buying the $700K home?
Several "points":
#1 is Affordability.
#2 close behind is having the means (cash cushion) to weather any downturns:

i.e. if you or your spouse had a job loss and either:
(a) you had to sell and liquidate in a declining market,
(b) had to make it through on one income for a while.

#3 Disconnect between monthly rents vs. monthly home purchase obligations

If one had to move out and rent out the property (for whatever reason, such as relocation and including the job loss scenario mentioned above) you would be cashflow negative from day 1.  Not to mention what would happen if the rental market also declined…

In answer to your other question about 1/2 the income and 1/2 the property value - yes, numerically it is same situation as the 700k, except it differs on one major count.  In order to do an apples to apples comparison, in Irvine, $350k will most likely buy you nothing more than a 1BR condo!  You would need to compare rents on a 1BR condo to equate my example at that level.
So how is a price decline going to solve this?
By having market prices more in line with rental rates, the couple in question would possibly have monthly mortgage obligations closely aligned with current real rental rates for the same square footage.  In the worse of cases discussed (i.e. job loss, etc.) they would simply be able to rent out the property at the market rate, be more or less cashflow positive, and be somewhat free to move to a new location with better job prospects.  At that point, the fluctuations in the home prices will be less of an issue to the couple.

crucialtaunt: "At that point, the fluctuations in the home prices will be less of an issue to the couple."
I was pointing out that even if the prices of houses are cut by half, a serious scenario like losing a job might subject a couple to not be able to make house payments. In your last paragraph you, stated that an alternative would be to rent after that. But if rent to ownership ratios are aligned, then the couple would have to move into a smaller, lesser place if they wanted to stay in the same area. This scenario would be more probable than the scenario of moving to a new location.
Thank You for the detail explanation though. I just think that the people that got caught up in the buying frenzy were either greedy, misinformed, or just plain needed a place. But then I see a lot of these bloggers wishing so hard for the prices to come down. The prices will come down but there are always factors that we dont see or the consequences that will result in this happening. There are always consequences in making money and doing nothing for it.