It is time for us Angelenos who have been around a long time to point out some realities that virtually all of your "reporters" have missed in their rabid search for a big story.
First of all, houses are still selling. Yes, they are taking longer to sell. But as you pointed out, during '86-'89, houses would sell within days or even hours of being listed. Of course such a frenzy could not sustain itself forever, nor should it.
Even during those boom years, houses nationwide would take months to sell. Also during those years, homes appreciated 20% or more (64% in Playa del Rey) per year.
One of the realities you are missing is that, even if house values depreciate 5% to 10% this year and next, homeowners have still seen staggering appreciation. You have cut from this historically cyclical real estate panorama a narrow slice, the decline from 1989 to 1990, while predicting even more doom and gloom in '91.