Here is an interesting comment on a SF news story related to the housing price slump:
BusStopLoser 12/4/2008 10:11:37 AMClick here to read the original story.
As we slide into widespread price deflation, the Fed will crank up the printing presses and push inflation in to the six to eight percent range. This will let real estate prices stay flat in nominal terms while declining in real terms - so your $500K house will still sell at that price while actually declining in real value $30-$40K per year. Let that run for three or four years and you have a 20-25% correction, with most people being too math stupid to realize it.
What do you think will happen?