I think most of California is going to get hammered.. for the simple reason that the average person can’t afford the average home.
I think coastal, as in literally on the water or a block away in a posh neighborhood could be surprisingly ‘sticky’. There is lots of super rich people out there in this new globalized American economy(especially in California), that make enough to pay the costs with traditional loans or even cash.
Those who will get "hammered" will be limited to the folks who took on loans they couldn't handle. The demand for housing in many areas of California, Southern California in particular, is going to continue to increase because:
1. There's lots of employment here in every industry you can imagine.
2. The climate is excellent.
3. There's only so much land for homes, while foreseeable demand for it is infinite.
"Average" is a relative term. "Average" people haven't been able to afford the "average" home in Southern and Coastal California for at least 15 years, yet average people are still here and thriving, and property values are at worst leveling off, and in many cases, rising "only" two to eight percent instead of 20 percent. There are more dynamics at work in real estate than meet the eye, I think.
Your idea of "coastal" as being within a block of the water is puzzling. I grew up in a home that was maybe a mile from the water, and you could see the whole bay and ocean from our windows. Believe me, it was most definitely a "coastal" piece of property. To me, a piece of property within a block or the water (posh or not) would be waterfront property. A subtle difference in terminology. "Coastal" property would be something within a mile or two of the water, I'd think. The view is not what makes something "coastal," but rather the marine climate and proximity to the sea. A marine climate is very, very distinct from non-coastal places, and its very possible (I know because I've done it) to live less than a mile from the beach and not see the ocean for months at a time, yet you never for an instant forget that you're "coastal." It's just very, very different from being inland.