There's a pretty pedestrian piece out from the AP which deals with how even with housing prices dropping, they're probably not going to drop enough in some communities to be affordable for middle and working class people. It concentrates on California, but mentions south Florida as one of the regions likely to be affected by this.
And if you squint at the article a bit, it almost reads like it's in favor of having the federal government stay out of the mortgage crisis a bit longer, in order to let the market bring prices down enough so that they're reasonable again. That would be nice for people like me, that, or salary increases so that the fixed debt I currently carry is worth less as a percentage of my income.
A lot of the focus is on people who want to live in the communities where they work--firefighters, police, teachers, nurses, even retail workers--and who have been completely priced out of ownership, but one thing the article mentions in passing is a reasonable commute. I think we're quickly approaching the day where few commutes will be considered reasonable anymore, at least to individuals making them in their own cars.
In city after city, ridership records are being set on Amtrak and other public transportation in large part because of high gas prices. People didn't suddenly wake up and say "oh, I'm worried about the environment, so I'll double my commute time and crowd onto the bus." No, the pain of filling the tank became greater than the inconvenience of public transportation. It's happened to me--although I'm generally a fan of public transportation. This fall, I'll be taking the TriRail to school two days a week rather than driving, mostly because I won't be able to carpool and the cost of gas per trip will be more expensive than the ticket. And when you're in a place where housing costs make up, generally, at least a third of a middle class family's budget, that dollar or two a trip makes a difference.
It will be interesting to see where the bottom winds up being in the current market. Amy and I thought about trying to buy about 18 months ago and just couldn't make it happen. Prices have come down some, but not enough to make it worth the risk. It might not ever get to that point for us, and we're squarely in the group mentioned in the article--just above median income, and priced out of ownership.