This is CUBA o Venezuela!

Even if the economy went full on Venezuela someone would make money in real estate, they just may not realize returns for awhile.Those that are at risk are those that play the game at a higher level and with higher risk, but they are always at risk.

I am thinking about getting a kidney transplant done in Venezuela because it's cheap.

We rent out one of our units to a family from Venezuela (documented and in US legally on temporary visa). 

You can still have flat prices with tight inventory if people don't derive the same satisfaction and have other alternatives.Inflation is the erosion of purchasing power of a currency (mostly due to excess dollars in circulation like in Venezuela as the government keeps printing).

Ask anyone fleeing Cambodia, Viet Nam, Zimbabwe, Venezuela, Argentina, and on and on if inflation or politics plays into owning gold. 

Argentina and Venezuela are the two countries where the odds that you property could be confiscated by the government are significantly above 0.As mentioned by @Matt Vaughn, the peso regularly plummets against the US dollar.

Of course, there are exceptions like Venezuela.

The majority of the money I see coming in is from Central and South America (just read the news coming from Venezuela today).

(Personally, I don't know how CA, and especially Southern CA has done as well as it has for as long as it has, but I'll be the first to say I don't have the mentality of a 'normal' homebuyer.)On the MF side, there are huge incentives for outside money right now (Venezuela's inflation was between 700-1000% last year, and the folks/companies who made their money during the oil boom there need to get their money out of that as fast as possible) so they're happy to be able to park a couple million dollars in US Real Estate, even if it means losing a little bit of money (or making very little.)