Calculated Risk summarizes a WSJ article on housing. The post is very informative and brief. Here is a preview.
Although there are markets where there is just too much supply (like Detroit), in most markets the problem is too much supply at the current price. So falling prices will help clear the market.
http://www.calculatedriskblog.com/2010/07/wsj-housing-market-stumbles.html
http://online.wsj.com/public/resources/documents/HagertyQuarterly.html
