If prices come down 30 or 40% is that bad? The only people it's bad for are the homeowners who WANT to sell. Otherwise they're just paying, or as the case may be, not paying the mortgages they were in yesterday. But as homes come down in price, is it really bad for them to be more affordable?

Housing in much of the country still remains historically overpriced in relation to both income and rents. We don't actually want housing prices to rebound, back to unsustainable levels. We'd be better off if housing prices collapsed faster, like ripping off a band-aid quickly. Then at least we'd know where the bottom was and could get back to the business of trying to grow the economy based on something other than real estate.

The sales data is good, though, at least to the extent that it reflects people relocating for new jobs.

Actually, no. This is the moment when the filthy rich can no longer afford filthy rich houses - a little downsizing, I'd call it. Of course middle class domiciles are a little more popular lately.

Nah kids, we're still in the dealing everybody out phase of this POKER GAME.

In a word, no. Bubbles tend to be symmetrical which is to say that they take as long to deflate on the down side as they did to inflate on the up side. And bubbles also tend to overshoot on the downside. This is a pretty well understood phenomenon that is repeated again and again and again with many examples available for study.

The best single online resource for getting a handle on where we are is Chris Martenson's Crash Course. The segment on bubbles is a great place to start and is in fact that segment that noted financial author and DNC Treasurer Andrew Tobias linked to which was how I was introduced to The Crash Course. Cut and paste the link or click my sig.

http://www.chrismartenson.com/crashcourse/chapter-15-bubbles

Well, I guess I'm sorry for regular folks who lost equity, but suddenly there's a condo in my own neighborhood (i.e. not in the squalor three blocks away) that has slid into the realm of affordability, so I'm actually pretty happy that prices are still dropping.

I'd love to have my own place, but there's no way I can afford anything more than like 800sqft (!!!), and I make a *very* comfortable salary. I can definitely forget about owning land, or even a house with a yard, and being a girl who grew up in a really rural area, that alone is hard to swallow.

Housing prices will continue to decline until people can afford them. Don't hold your breath, because unemployment is still increasing and most of the few jobs that are available don't pay very well.

It depends on which side of the equation you're on.

If you're renting and would love to buy, hang tight a bit more for prices to stop falling. Then maybe they'll fall into the realm of affordability for normal people.

If you bought years ago, you might see your house price fall to some kind of normal level also. We bought in 1996... and the prices our house rose to have been nothing short of ridiculous.

If you bought high and are watching the price fall... I agree it stinks. But that's no reason for the prices to remain astronomical for everyone.

You could call it "falling prices" or you could call it "back to reality prices." Depends on your point of view.

You could always move. Houses can be had in Michigan for well under a hundred grand, also in either of the Dakotas or many places in Texas. It just depends on how bad you want a house.

What you can't see in the statistics is that this is not equally distributed over the entire US. I live in northeast Ohio -- the underbelly of the Rust belt -- and here, if you live in a working class or middle-middle class area, you are devastated. Housing values have fallen over 30% and they were never sky high to begin with. Average homes simply are not selling -- some on my street have been for sale for two years now, with no lookers. A foreclosure home behind me just sold at auction...now, this is a colonial in very livable condition -- for $9000. You got that right, NINE THOUSAND for a 1500 sq. foot colonial on 1/4 acre of land, with two car garage.

However, if you head up to McMansion Acres, prices have not increased but they are stable. Your $400K home is still worth that, or nearly that. Most wealthy people are simply not being affected by this downturn; it's a middle class, working class and poor phenomena.

I was also in Boston earlier this month. Again, sales are a bit flat, but my friend's triplex, which they purchased in 1998, went from $210K to $650K and it hasn't gone down significantly. They just borrowed a big wad of it to remodel, so the home was appraised just this year and the value is presumably accurate. They are just as laughing/happy/gloating as anyone at the height of the boom, at their wise judgment and good luck.

I assume this is probably the case in other desirable areas, major metropolitan neighborhoods, cute urban hipster places. No big increases, but stability at the high point. It is the rest of us that are taking the catastrophic fall; ironically, the people most likely to have CAUSED the housing crisis (i.e., ridiculous increases and speculation) who are feeling the least of it.

So -- is the bottom? I say "no". Apparently, even if a decent home is available at the 3rd World Fire Sale price of $9K, people will not buy it if THEY DO NOT HAVE JOBS. If you are not working, then even a FREE HOUSE will be too expensive (upkeep, taxes, etc). Many Americans right this second are LEAVING the ranks of homeownership, and becoming renters, and most will never own their own home again (as they have lost all their equity and investment, and do not have the years available to regain it).

Nothing, absolutely nothing, will improve until there is a serious effort to create new jobs -- every possible program (health care, etc) is going to stall out in an economy where over 11% of adults are unemployed, and many of them will either NEVER work again at a full-time job or they will have to take jobs considerably under their skills/education.