Dozens of readers spoke up on the topic of what the real estate downturn means to the economy. "Northwest Airlines passes out tips for living on a tighter budget including dumpster diving and never shopping while hungry. A sign of things to come?"

"Although I’m a big proponent of making hard choices if you’re serious about your goals, I’m thinking even with home price reductions the availability index is still going to be heading south for quite a while. I was wondering if we might do a thread on signs of the downshifting economy."

A reply, "A lot of stories about TJ and Costco being relatively empty lately (I’ve noticed my shopping cart doesn’t bump as many people in both lately, too!)."

Another said, "Not having any problem getting any work done….Just signed a contract to re-roof 10 houses yesterday…They are starting on Tuesday….Try that a year ago…."

One pointed to plant closings. "Boeing planning closure of C-17 plant in Long Beach, CA, and laying off 6,500 high paid employees. Raytheon in S. Cal also laid off few hundred employees last month. Looks like the defense industry is going to exaggerate the downturn in S.Cal RE, just like it did in the 1990s."

A reply, "How many of those Boeing employees [and subcontractor employees] invested in second or third home because they had a 'steady' job? How many flipped homes? How many bought homes recently and was dependent on two incomes?"

One answered, "If its anything like where I work (also Aerospace engineering), it is an amazing number. I have one coworker with 5 'investment' properties. Another coworker with 4 investments. We then have a smattering of those who will be smacked down in various geographic 'condo crazes.'"

"But what’s scary is the shop floor… There are people who earn a fraction of what I do and 'own' two or three homes where I dream of buying but feel I’m priced out (as I’ll only use a 30yr fixed rate, etc.). I’ve found out that almost all of them put 2 or 3 homes where I dream of buying. But what do they own? With them typically putting 0% down, only their appreciation and so much of that has be HELOC’d to death. 1 in 4 of my coworkers is in speculative real estate!"

Another saw the effect in Texas. "C-17—–Texas takes a small hit, too. 'In Texas, Vought Aircraft is the largest subcontractor for the C-17. Texas has more than 5,600 workers whose jobs are directly tied to the C-17.'"

The Phoenix Business Journal. "A national economic index is on the decline as a slowed housing market in Phoenix and other major cities begins to take a toll on the overall economy. The housing market in Phoenix, Las Vegas and other major metro areas has slowed down substantially in recent quarters with houses sitting on the market longer and prices declining."

"The real estate and construction sectors very important to the Valley and state economies, accounting for significant business investment and job growth in recent years."

"Los Angeles County's civilian labor force receded by 30,000 to 4,850,000 in July, according to the state Employment Development Department. The job market may dip into negative territory as housing continues to cool, said economist Christopher Thornberg."

"Real estate prices will likely trend down slowly and be weak for a long time to come, he said. When the real estate market falters, construction and other industries take a hit. Consumers were spending like mad over the past couple years because of the wealth from their homes, Thornberg said."

"The economy in recent years was driven by real estate and consumer spending. 'There needs to be more balance,' Thornberg said."

The LA Times. "Overall, the construction sector, which includes residential building, shed 2,100 jobs in July. That's up from an average monthly loss this year of 1,843. Commercial builders attribute the net decline in construction employment to layoffs in home building that involve workers who have not moved on to commercial projects because they lack the skills, are discouraged by longer commutes or are otherwise uninterested."