I have seen various arguments on this subject and here are the variables: How big was the boom: Median house price changes worked out by Case-Schiller requires a 25% decline from peak prices. Adjusted for sq. ft. a 40% decline is needed. Adjusted for amenities can be guesstimated based on mobile home/condo prices and adding in land prices. (1890s sized single family houses are no longer built but low rent MH, condo and apartment units of such size do exist so this can be calculated.) My SWAG based on having lived in an extensively remodeled 1890s built house is that required land improvements for amenities are the big expense. Pulling cables, running wires, laying pipe, paving roads and putting up poles plus all other land improvements needed to support amenities and the neglect of such maintenance in built up areas is the biggest cost of all in building up house costs. The non-payment of assessments for such improvements and the costs being laid off on those still paying their mortgage will drive prices way down. The US when counting all forms of housing of which there are untold numbers means that the country is catastrophically overbuilt. Frictional housing (foreclosed, vacant and other forms of non-used homes) means that about 111% of housing capacity is needed to account for new household formation. Current inventory is believed to be about 120% in most categories but in some cases: extended stay hotels, assisted living facilities and other optional forms of housing the down economy has jacked up supply to somewhere north of 100%. Less business travel and more people moving in with their parents means that a lot of low, low rent housing is coming online. QE I-N is an attempt to inflate out of this mess but salaries do not keep up with inflation for most people so in real terms housing prices will collapse due to a rent war if QE continues. The so what attitude to reduced prices already seen in the computer field will transfer to housing. So where will the bottom be found?