It comes as no surprise that the areas in California that have lost the most real estate value are those areas that were targeted for high-buildout, cheaper homes in areas remote from city centers and infrastructure. The "policies" that instigated this buildout were the opportunities for developers that SCAG targeted for assigned growth areas in a classic sprawl pattern (see the sidebar on this page, "SCAG forces overdevelopment"). This leads to the interconnected demand for water that has no existence except on paper, as well as pressure to design and fund the billion-dollar high-speed rail project from Sacramento to Los Angeles, thus creating demand for real estate around the proposed rail stops. There's also a blog on rail projects here.
Statistics from Zillow.com show how this strategy has imploded.
An article here from Yahoo Finance discusses this issue and continues to follow the real estate implosion. The human side of the story, how suburban sprawl is driven by the banking and real estate industries, is here in The Cul-de-Sac Syndrome, Turning Around the Unsustainable American Dream.