Three years ago, plenty of folks considered Patrick Killelea to be a loony tune raving about real estate Armageddon.

While most Americans - and especially people in the Bay Area - swore by the gospel that investing in real estate was a sure road to riches, Killelea, a disenchanted house hunter, peddled a heretical counterview: The housing market was a gigantic bubble ready to burst. Through his blog, Reality Parser (www.patrick.net), he expressed his view that home prices were grotesquely overinflated.

With foreclosures rising and home prices diving, there is a bright spot in California’s residential real estate market: Solar-powered homes are starting to outsell traditionally electrified new homes in several markets, and developers are stepping up their use of the technology.

Perhaps it’s only fitting for a state that so openly celebrates its sunshine. Still, the growing popularity of household solar power is an encouraging sign for the thousands of solar enthusiasts and vendors gathering in Long Beach this week.
“Those builders are seeing that they’ll get more buyers coming to their developments when they have solar. They sell like hot cakes,” said Bernadette del Chiaro, energy specialist at the advocacy group Environment California.

Existing-home sales dropped in August when mortgage availability problems were peaking, according to the National Association of Realtors.

Total existing-home sales — including single-family, townhomes, condominiums and co-ops — were down 12.8 percent to a seasonally adjusted annual rate of 5.5 million units in August from a year-ago level of 6.31 million, and are 4.3 percent below the 5.75 million-unit pace in July.

Lawrence Yun, NAR senior economist, expected the decline. “The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales, with many buyers having to search for other financing when loan commitments fell through,” he said in a statement. “Lower sales contributed to a buildup of unsold inventory.”