If you look city by city you can see how localized the housing bubble has been. E.g. the median price in Mountain View is now where it was in 2005, just as in Phoenix, but the intervening bump is much flatter.

http://www.trulia.com/real_estate/Mountain_View-California/m...

Here's the town with the highest foreclosure rate in the country, Stockton, California:

http://www.trulia.com/real_estate/Stockton-California/market...

All around the edges of town are new subdivisions in the middle of being built:

http://maps.google.com/maps?f=q&hl=en&geocode=&q...

These guys are going to be lonely:

http://maps.google.com/maps?f=q&hl=en&geocode=&q...

Not too lonely, the sat footage is way out of date. Try Streetview... It's a complete cookie-cutter neighborhood.

I'd love to live in that last house. Think of all the touch-football games they could have!

I'm not too familiar with these places, but when looking at these graphs during the price increases before the bust (i.e. without the benefit of hindsight), could one not also realistically explain it as 'demand > supply'?

Yeah, but housing demand can usually be pegged to income, which has been flat. Speculator demand is what explains the price rise and that demand is what makes a bubble. That is only part of the reason. Artificial demand was created by lowering mortgage standards allowing many more "fake bidders" into the market. Check this out http://www.mortgagecorp.com/noincomenoasset.php

On the same theme, not much of a decline in NYC:

http://www.trulia.com/real_estate/New_York-New_York/market-t...

Especially compared to the one in 2003.

There's something very wrong with that 2003 picture. If you look at the corresponding number of sales you see that there were less than 10 sales in 2002 and 2003. That can't possibly be correct (even taking into account a post September 11, 2001 slow down) and data pre-2002 looks fishy too because it's order of 100s of sales.

If you liked those graphs, you will probably enjoy the graph of land prices in Japan when they had their housing bubble:

http://www.oftwominds.com/blogoct06/japan-bubble.html

Interesting that sales seem to be picking up and that seems true in many markets. Perhaps that's a good sign.

Based on the fact that prices are still declining, I would guess those are forced sales. A good sign is when prices stop falling.