one more thought.
Ok, lets say the market prices start of make sense again using the rent v. buy math for owner occupied housing.

Well, who is going to buy? Where are the buyers going to materialize from? Yes, some renters will decide to buy, some piggington’s will take the cash from under their mattresses (err, CD’s) and buy (thats me!)

But will there really be a buyer for every house that gets priced at the “make sense to buy rather than rent” level? It don’t see how given that 1) home ownership is already at record highs 2) foreclosures will flood the market 3) lending standards reduce the pool of buyers and 4) people stop believing in real estate as can’t lose investment.