Housing in History
The housing bubble was a major cause, if not the cause, of the subprime crisis and of the broader economic crisis we now face. The perception that real estate prices could only go up, year after year, established an atmosphere that invited lenders and financial institutions to loosen their standards and risk default. Now the defaults are happening, massively and contagiously.
As of this writing, according to the Standard & Poor's / Case-Shiller Home Price Indices, which I helped create, U.S. home prices have already fallen nearly halfway back down to their pre-bubble levels. The rate of fall of prices has been speeding up.
Nominal price decreases will eventually slow down and stop, but may not then keep up with general inflation. Continuing real price drops could eventually bring