Others expect a soft landing, and say the slip in San Diego's median home price was inevitable as it has more than tripled since the late 1980s.

"You don't go from frenzy to normal without an adjustment," said John Karevoll, an analyst with real estate research firm DataQuick Information Systems.

The year-over-year fall in June's median price was the first for the San Diego market since the early 1990s, but it was only a decline of 1 percent.

"I wouldn't put a lot on that 1 percent drop at this point," said Alan Gin, an economist with the Burnham-Moores Center for Real Estate at the University of San Diego. "There is no panic with people trying to sell their homes."

San Diego's June median price for existing and new homes fell 1 percent to $488,000 from $493,000 a year earlier and their sales fell 24.1 percent over that time as demand for condominiums cooled, according to DataQuick.

GLUTTED CONDO MARKET

San Diego is experiencing a "condo-led decline" because owners are putting units on an already glutted market, said Alan Nevin, a consultant with Marketpointe Realty Advisors.

"In a lot of parts of San Diego, there is no give at all on the single-family side," Nevin noted. "It's slow but sure. They are taking time to sell, but without deep discounts."

John Burns, an Irvine, California, consultant to home builders, notes San Diego area prices for existing single-family homes have been flat for a year. June's median was $565,000, up 1.8 percent from a year earlier.

"There are no desperate sellers in the resale market with two exceptions," Burns said, pointing to investors who overestimated demand for high-end condos and apartments converted to condos.

The market's median price for resale condos fell 2.1 percent to $386,750 in June from $395,000 a year earlier. The month's median for new homes, which includes new condos and buildings converted to condos, dropped 8 percent to $422,000 from $458,750 a year earlier, according to DataQuick.

Developers may put plans for new condo projects on hold over the near term, said Raphael Bostic, an economist with the University of Southern California's Lusk Center for Real Estate.

"A freeze to construction is what I think what will happen," he said.

Meanwhile, overall home prices across San Diego will plateau, Gin predicted.

"The conditions aren't there for a big rebound in prices or for a big drop," he said. "We would need a big drop in interest rates to get any significant movement on prices on the upside. We would need to see some significant job losses, a recession at the national level, to get a big drop in prices."

"Persistently higher inflation would erode the performance of the real economy and would be costly to reverse," Bernanke said in testimony prepared for delivery to the Senate Banking Committee. "The Federal Reserve must take account of these risks in making its policy decisions."

The Fed chief, who took office February 1, issued the stern inflation warning as he presented the central bank's twice-yearly report on monetary policy and the economy.

He said the economy appeared to be "in a period of transition" to more moderate growth from a swift advance earlier in the year. He said this should gradually help ratchet down some of the price pressures the economy was facing.

Still, Bernanke said Fed officials must take other potential outcomes into account as they considered the appropriate level for U.S. interest rates.

"We must consider not only what appears to be the most likely outcome, but also the risks to that outlook and the costs that would be incurred should any of those risks be realized," he said.

The Fed has raised benchmark overnight borrowing costs to 5.25 percent in 17 small steps dating to June 2004. Financial markets have been closely divided over whether an 18th consecutive increase will be in the offing at the Fed's next meeting on August 8.

U.S. Immigration and Customs Enforcement agents, U.S. marshals and FBI agents worked with the military on the sweep, which was conducted between 6 a.m. and 7:30 a.m. when most of the thousands of soldiers and civilian workers who live off the post enter the gates.

"Today's operation was part of our ongoing force protection measures," said post spokesman Tom McCollum. "There were no incidents or accidents."

Some of the people detained were from Mexico, Guatemala,
El Salvador and Honduras, ICE spokesman Marc Raimondi said.

Four people were arrested for drug possession, McCollum said.

People trying to enter Fort Bragg with false IDs can be charged with criminal trespass and presenting false identification, McCollum said. The garrison commander also can prevent contractors who knowingly hire such people from working at the base.

In the past year, more than 150 people have been detained as they tried to enter Fort Bragg without proper ID, McCollum said. The base is home to the U.S. Army Special Operations Command and the 82nd Airborne Division.

Deputies were pulled out of the desert when night fell, said sheriff's Sgt. Jim Kempher. They left water behind and posted some deputies in the area until the search could resume later Wednesday for any more immigrants.

Arpaio, whose office made the discovery, said investigators suspect the immigrants were left in the area until smugglers could arrange for transportation elsewhere.

"They are stashing them out there," Arpaio said.

Authorities gave water to the immigrants, who were being turned over to federal immigration authorities, Arpaio said.

Some immigrants said they hadn't had water since Sunday, said Lt. Chuck Siemens, who was in charge of the search operation. "They were bombarding us for water. We passed out water bottles, and it was a frenzy," he said.

The state has a new anti-immigration law, passed amid frustration over Arizona's porous border with Mexico and the costs of health care and education for illegal immigrants. Immigration is usually a federal responsibility.

The immigrants found Tuesday won't be arrested, Arpaio said. They weren't caught in the act of being transported by a smuggler - a necessary element of proving the state crime.

"We are now zeroing in on the smugglers," Arpaio said.

Maricopa County, which includes Phoenix, is Arizona's most populous county.

Spain asked in May for help tackling an influx of migrants to the Canary Islands, but it has yet to arrive.

About 11,000 people have landed on the islands this year, beating all records.

Sources in Brussels say not all the countries that promised ships, aircraft and manpower have made good on their pledges.

They add that it has taken time to define the details of the operation, which is the first major task entrusted to the new EU border security agency, Frontex.

Registration system

The proposals to be discussed by the European Commission on Wednesday define the roles rapid reaction teams of border guards would undertake and how they would be funded.

In the Canary Islands operation, Spain will control the foreign border guards, but Frontex experts will provide support and assistance.

At their summit last December, EU leaders invited the Commission to "bring forward a proposal for the creation of rapid reaction teams made up of national experts able to provide rapid technical and operational assistance at times of high influxes of migrants".

The Commission is also expected to approve on Wednesday a list of priority policies to tackle illegal immigration.

These are expected to include a new system for registering the arrival and departure of non-EU citizens visiting the EU, and encouragement to member states to crack down on employment of illegal immigrants.