It happens in California first

Mess in the West: 

Home Sales Index Hits 7-Year Low An index that measures contracts to purchase previously owned homes was mostly unchanged in January from December, according to a report Friday. But the index showed another drop in the West, where it has fallen for eight consecutive months.
The index fell in the West to its third lowest level since the NAR began its tab in 2001, surpassing only two months from the summer of 2007, when housing markets were beginning their free fall.
Western markets such as Las Vegas and Phoenix have witnessed some of the largest price gains as they rebound from very low levels. California markets, meanwhile, have grown much less affordable given the combination of price increases and higher interest rates.