While California home prices are still far below the peak levels of 2006, some economists think California is on its way out of the woods. “Now we’re seeing the interior [of the state] has stabilized – because prices have fallen by 50% to 60% already,” says Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. The combination of cuts in price, reductions in mortgage rates and all sorts of state and federal programs to incentivize buying activity have brought stability. “Prices are increasing only modestly, but for all intents and purposes, they’ve stopped falling,” Gabriel says.