California Real Estate Buyers Committed to Bigger Mortgage Payments... Scary

Not really surprising information from Dataquick today which reported that Southern California home sales hit a 9 year low. What was scary was Inman News article on the story which indicated the following...

The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $2,437 last month, the same as the previous month, but up from $2,052 a year ago. Adjusted for inflation, current payments are about 6.2 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle, DataQuick reported.

Some of you may remember what happened in Southern California in 1989-1990 with property values. Also, what is unknown is how many "interest only" loans where factored into this average to determine this monthly payment data. Interest-only mortgages where was practically non-existent in 1989.

What do you think... will common 2/28 interest-only adjustable rate mortgages cause bigger problems to real estate values than in 1989?