I believe trying to determine the effects of interest rates, tighter lending standards, etc on home prices becomes very easy when you just look at monthly payment. People buy based on monthly payment and whether they can afford that payment.
During the boom we saw more and more creative lending to keep the monthly payment disproportionately low in relation to the purchase price. Toward the end we saw negative am loans take this to the absolute limit. I remember when I heard that neg am loans were being advertised that the top was very near. The housing downturn is going to be much longer then most people expect and will remain low for a long time. Think in terms of an L shaped recovery vice a V shaped one.
