The NYT talks about housing as a wealth generator:

The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.

Housing is not now and never has been a wealth generator. With the exception of the underlying dirt, it is a consumption item, like a car. Structures deteriorate with time, demand expensive maintenance, and become obsolete. What housing did generate in the “second half of the 20th. century” is an immense overhang of debt and empty housing, as people used borrowed money to speculate in housing. The appearance of wealth by was generated the run-up in debt being used to boost consumption. Now that consumption has to be paid for, and the losses due to the malinvestment in housing accepted.

Housing prices (and those of other assets) will continue to decline. Home buyers are still far too sanguine about the prospects of future appreciation and speculation is still widespread. Like any other speculative market,  it is safe to assume we haven’t seen the bottom until gloom and despair settles in. Articles like this one are a start in that process, but as far as the rationalization of the housing market is concerned, I will quote Sir Winston Churchill: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”