An interesting essay I found:

It has finally happened. In the Sunday streets, here where I live in west Los Angeles, there has been a definite downshift. There are still plenty of open houses, still signs at the street corners beckoning drivers toward this or that destination.

But home sales dropped 25 percent in Southern California in August, the ninth straight month of falling sales. Nationally, new housing starts are down over 20 percent since their peak. In short, the air has definitely been let out of the housing bubble.

Now, we're a little shell-shocked as we look around at the crazy, manic time we have lived through and how it transformed the landscape. In my neighborhood, there was something wild about it, a kind of frantic, optimistic acquisitiveness, packs of people spending their Sundays roaming from house to house. Some, yes, just looking, but others intending to buy, a Tuscan villa, a mini-chateau, a fixer-upper, or a tear-down on a desirable lot where they could then build lot line to lot line.

Many of the small houses like mine have been scraped away to make way for giant replacements. There were many days I couldn't get down my street for all the trucks, the constant nerve-jangling noise of construction the daily soundtrack.

Of course, it wasn't just here in Southern California. Similar things went on in many other places: Vegas and Atlanta, Houston and Miami, and New York, too. People flipping houses, buying second ones, huge places with all the appurtenances, the granite countertops, and designer faucets, and flat-screen TVs.
 
 
    A status issue
No question it was a status thing, people identifying themselves as one of the haves in an economically divided country. But there was something else, an attempt to stem some innate longing or loneliness or insecurity. "This is me. This is where I belong. Here I will be happy. Here I will be safe, from terrorists, and flu bugs, and gang-bangers."

Real estate brokers became the lead players in novels by some of our finest writers, Mona Simpson, and T.C. Boyle, and Richard Ford, all those fictional brokers ruminating about the American dream as they ushered perspective buyers through Midwestern tracts or gated L.A. communities or quaint East Coast towns.

Of course, plenty of people, the young, the poor, and even the middle class, were priced out of the frenzied real estate market going in. Even in parts of the country where prices never reached the stratosphere, hardworking people were not immune to refinancing their homes in order to buy all those relentlessly advertised goodies.

Now there does, at last, seem to be a respite from the frenzy. House prices are down, and so are those refis. People will be hurting, as usual, those who can least afford it, the construction and landscapers and those who work in plants that manufacture furniture, and appliances, and all the other symbols of the good life, not to mention those who signed on for one of those tricky mortgages.

And yet it is hard not to be happy about the cessation of this frenzy, certainly for anybody clinging to the old-fashioned notion of a neighborhood of small, friendly, affordable houses. Alas, in so many places -- certainly here where I've lived for 35 years -- that world is now permanently gone.