Depends where you buy in California. Certainly you won't find that price in San Diego, but check out Imperial County or the High Desert Counties near Baker or Victorville. I wouldn't live there because it is hot and dry like Claude, Taxus (where my RV got a flat tire one year. I ran into a local Taxan homeowner in the public library complaining out loud to the librarian about his property taxes going up)- but the property taxes are fixed unlike Taxus.
It all depends if you wait for the real estate cycle to hit bottom - my guess is that California prices will go down in 2007 or 2008.
Well, I'm not planning to move to Cali.
Besides, in my line of work, if prices drop that low, I probably won't have a job. Not in Cali anyway. And if I do, my income will drop proportionately...