As Atrios explains, it really is quite simple:
Watching a 3 bedroom condo fall in listed price from $610K to $449K I'm inspired to make the obvious point that housing prices will come down until they hit the point where "average" housing units are priced such that typical potential homeowners can afford to make the monthly payments with typical mortgage terms.
This is one of the reasons why the combination of a burst housing bubble and a systemic credit crunch is so dangerous. Together they are creating the potential for a powerful downward spiral.
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