republicans and their evil corrupt politics is to blame for this.

It's a market. Markets go up and down. People with unrealistic expectations who don't know how to manage money are responsible for this. One thing you have to have in this world and they don't even go near it in the American school system is how to manage money.

Well, they played the game quite well, propping up the Bush economy for seven of his eight years in office. Now, it's time for Democrats and voila, surprise, recession (depression?) awaits for them to deal with and most likely catch the blame for too. I think I hear the whines from the right echoing about inflation during Carter's term which, of course, any idiot knows was caused by the Nixon/Ford administration which preceded him. Will the American public be stupid enough to fall for the same trick again....of course. How else could anyone explain the REpublican Party's resurrection so many times.....people have short memories.

This is what happens when you allow corporations unfettered access to the laws of this nation.

Both the housing bubble and the tech bubble started in the early 90's. Both occurred as a result of concerted effort and manipulation of the laws and regulation of the banking and insurance industries. This followed a near 20 year assault on labor law, organized labor.
The reach of the real estate bubble went much farther than the tech bubble, simply because it started with a real asset. The banks and insurers guaranteed a consistent rise in value, as they had control of the valuation process. The market didnt set the price, the price was marketed to the "consumer".
They didnt count on their assault on the working citizen to come back and bite them in the ass. They dont even realize the true impact and reach of this economic disaster.
One must wonder how many homeowners can take a 15-20% hit on their property, followed by a stagnant market with no prospects to recover your losses, perhaps for 10 years or more?
Refinancing isnt going to work.

Over the long term, from US colonial times to present real estate has been a mediocre investment, averaging about 4% return p.a. (if my recollection is right). That's inferior to investing in bank notes or US Government bonds over much of that same timeframe. But that record seems to have been tied to series of speculative booms and busts. Since the end of the depression -- virtually 3 generations -- growth real estate has been a very strong asset, still affected by cycles.

IMHO, I think the last 3 generations experienced an "equity boom", where tangibles and hard assets managed to inflate in value even as interest rates have been kept artificially low. Coincidentally (?), those who owned equity assets profitted handsomely, and those who financed them through leverage did even better. But those too poor to participate or too cautious have ended up becoming the have-nots over this period.

The cynic in me would say that the "haves" can manipulate the timing of the cycles and make their moves quickly enough so that the average participant in the "market" gets stuck holding the bag as the dynamics shift.

Let's use Florida's real estate experience oer the past 2 years as an example: It had to be obvious, when the cost of renting a beautiful beach house in Florida was a tiny fraction of the projected cst of owning one that either the Florida rental market was about to get very expensive, or the Florida real estate market would collapse. My bet was on it collapsing. Scarcity of land was being met by over-development upward and into places there should never have been development in the 1st place. But what was becoming even scarcer was a supply of willing buyers. Greed and fear meets supply and demand. And the rest is history!

(But the average Joe and Jane were generally left holding the bag.)

This is complicated but some of the pricing drops seems to be a correction, where real estate prices were booming, unjustifiably so.

Now that the prices are down though, it will make it easier for first time buyers to buy. It sucks for those who tried to take their equity out of their houses to do something else, but perhaps you shouldn't spend what you don't have? I can't see myself doing that anyway.

"People with unrealistic expectations who don't know how to manage money are responsible for this" Stirsumip.

Like Byrd said, the Republicans.