I am an investor, plain and simple. I generally invest in companies (stock and debt) but have turned my eye the past year to real estate. Looking at historical data has led me to conclude that home prices are generally 20% overvalued still (as of April 08). For some areas such as Chula Vista, the valuations are already approaching fair.  For others such as Carmel Valley, valuations remain worse then average.  I have looked at data such as rents:home prices and home prices:family income. These type of ratios were very consistent for many decades and went off kilter in the early/mid 2000.  Seems prices need to return to 2003 levels before we get to fair value. Of note, stocks over shoot every decade or so, but homes have historically not been so volitile. On the way down, stocks often "over correct". Will homes?  Also, there as never been a period since great depression with so many home owners "under water".  And there have never been zero down, no doc loans?  And HELOCs this big.  What does all this lead me to conclude.  I am worried.  And deceptive practices by agents, brokers, etc have only made the situation worse.  And now the goverment in meddling in this. ugh.