What Mr. Dawson points out is obvious to many, but the commentary is singular. In essence, there are many more problems out here and they are either being overlooked or ignored. Let me start with the excess inventory and agree with the blog. However, there is no mention of what is still currently being built nor planned. This country is still rife with open projects, most of which are still aimed at the luxury market. Some of the major builders have gotten the message and are trimming frills which allow for some price reductions, but it is probably too little, too late. The available inventory will remain high for some time to come. Prices are going to continue on a downward spiral. I think that we should get our collective heads out of the sand and realize that the U.S. is not the only place on earth. Housing default is spreading to the U.K. and Southern Spain. Both of these areas were participants in the boom. Spain in particular is worth a serious look as the country has a serious water problem. You don't have water shipped in by boat unless you really, really have a big, big shortage. That's the current stop-gap solution. The long term one is hope for rain. A contributing reason is over building. Every home needs a water supply. Barcelona is currently where Atlanta, Ga. was last summer and that is looking at running out.
We have the same situation. We are using more water for farming than the aquifer's in many area can provide and little by little they are going down. Nevada has little water naturally and Lake Mead is a primary source. For that matter neither does California and the State has been working on this problem for years. Florida has water limits but has never limited building. The water wars will soon begin. And you thought that we have a problem with the price of oil?
Since this is an investment page I believe that one of the next "good buys" (taking from Paul Kangas) could well be in the plumbing industry. The thing that we all use every day uses water at a rate that surpasses a race car. Japan has had water problems for years. Take a look at a Japanese toilet - might be the next import.

While Mr. Lindblad makes a very valid point, I think perhaps the answer might be a little simpler. With gas approaching or beyond $4 gal. (& no let up in the rise visible) is it any wonder that housing prices in the suburbs & ex-burbs are dropping?

I have not looked closely but I have seen no data that suggests that AZ, NM, NV property values are dropping any faster than average. But to be fair I have seen little beyond local ancedotal evidence about the housing prices reacting to the commuting times & expenses. It just seems obvious to me.

& no one really seems worried about the pending water crisis. & Mr. Lindblad, the prophet Jeremiah was routinely ignored until it was too late also.

House prices are plummeting due to the glut of inventory from overbuilding and foreclosures. On the demand side the sudden change in how buyers are qualified to obtain mortgages will keep things down for a while. But the trend in housing is always up because the demand gets greater every year if only because of population growth.

Everyone has to live somewhere and home ownership has been one of the most important parts of the "American dream" and will not go away.

The rate of house appreciation will get back in line with reality and life will go on as usual as people adjust to new ways to own homes, some of which I'm sure we haven't dreamed of yet.

The housing industry seems to have taken its clue from the auto industry which kept on producing huge vehicles long after the fuel prices made them a liability to the manufactures instead of an asset. They just don't want to believe that the goose that laid the golden egg is dead. Smaller, less expensive housing is doing very well in some parts of the nation. If you look at the areas where prices have gone up over the last year without exception you are looking at areas where the median prices are lower than the national average.

everyone should not even buy houses right now let them set along while these house have not come down enough, don't let them tease you they can bring these house down to where they use to cost in the 70'swhere you could buy a house for 50,000.,-80,000..don't let the government dictent what is high or it's a borrowers market ...this is not a buyers market or sellers market, we are in recession and they dont want to tell you that ..this is why they issued those checks to ythe public to restore the ecomny