What about now then, now that prices are down 10 -15%? Now that prices have fallen this is great news! Affordability index has fallen sharpley, and although loans are harder to qualify for (read normal) there are good deals to be had. In the long term lower house prices will allow more folks to stay in the area. Companies who previously could not attract workers to the bay area and indeed were being forced to leave will now have the option to stay and workers will be more inclined to move here after all.
Families who in 2005 could not afford to move up to a larger home, will now find if they do the math, that it is now relatively more affordable for them to do so, and although their house will sell for less, the destination house will be purchased for proportionately less also.
Make no mistake, this slowdown although fairly widespread will not last forever, since more people are still moving into the state that moving out.
I say to sellers now, forget 2005 prices, they are gone. Be realistic and you will sell your house.
No doubt, wherever you move to, the money you feel you have 'lost' on your home sale, you will more than make up on a purchase. All you are doing is transferring your equity!