It Ain't Over 'till It's Over

Implications: We are still years away from any turnaround in the RE market. Prices will drop to 2000-2001 levels before confidence is restored. Affordability is not where it needs to be, and "investors" are gone.

Analysis: Whether it is Florida, or mostly any other place, we are only in the phase of correction where the builders are starting to default.  Banks are definitely going to get hit with another, bigger, wave of defaults and foreclosures.  The Fed and the government can do all they want, but until people see prices going up, they, for the most part, are going to remain on the sidelines.
RE was 2.5% of the 3.5% GDP for several years.  With that removed, the real economy is showing itself.  A simple fact is that house prices need to get lined up properly with real wages, not the case at all today.