BusinessWeek looks at 10 markets in California where housing demand has picked up of late, boosting prices off the lows we've seen in the past few months.

One of the reasons demand has picked back up is California's $10,000 tax credit for buyers, on top of the $8,000 federal first time buyer credit.

Peter Toner, a Realtor at Prudential California Realty in San Diego, says luxury homes are lingering on the market, but properties listed for less than $400,000 are selling quickly.

But one of the things that may be holding California and the rest of the higher-end market back is the jumbo mortgage market. Rates on jumbo mortgages are generally higher, and qualifying can be more difficult, so homes that are priced above $750,000 have a much more limited market than homes below $400,000, squarely in the prime lending zone.

As the biggest single market in the country, California's woes in many way drive the national perspective on the housing market, so it would be "a good thing" if San Diego and other cities showed some signs of life, plus California's state government is already in a crisis mode.

But in other Western cities like Phoenix and Las Vegas, the housing news so far is still mostly negative.

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