Readers suggested a topic about psychology and home prices. "How long did the 'psychology' of the market continue to push home values up even after fundementals were out of line? How long will the 'psychology' of the market continue to drive home values down even after fundementals get back in line?"

One said. "I also would also like to know how much will people overpay for a property based on psychology, and it would be interesting to know how people plan to make the payments when they go up, (do they think they are going to get raises, do they count on refinancing etc., do they believe real estate always goes up ?)"

Another, "There was a book written almost 150 years ago called 'Extraordinary Popular Delusions and The Madness of Crowds' by MacKay, that chronicles various bubbles (Dutch tulip bubble, South Seas bubble, etc)."

"Although these bubbles took place 200 to 400 years ago, human nature has not changed 1 iota, so the stories read no diffferent. (aside from the toxic loans… ha)."

One replied, "If I recall correctly this topic was addressed as 'resonance' and the 'feedback loop' in Robert Shiller’s book Irrational Exuberance. Probably not a bad idea to give Shiller’s book another reading at this stage of the bubble."

Another said, "It’s kind of like reading the crazy revolutionary predictions about the Internet in 1998. Or Ross Perot’s rantings from 1992. Now we can see how foolish we were to believe any of it."

A new reader added, "Being a total newbie, I have the following question: I realize that prices should eventually come down in places where there is a lot of excess inventory, but what of areas like the LA Westside, where I would like to buy a house?"

"There’s no denying that there are quite a few ugly McMansions and more than a few suspiciously new monster SUV’s. But for the most part, houses are sensibly sized and people drive sensible cars that look a few years old. The Mc Mansion owner is certainly in for some rough times, but I don’t want his/her house anyway."

"Is it reasonable to expect that a significant number of people who own sensible homes are leveraged to the hilt and will have to sell in a market depressed by the speculators? For the time being, I don’t see that happening. If they are sensible, they will try to hold on to their house unless they absolutely have to move, won’t they?"

"So far, in my area, there are a couple of crappy houses up for short sale, a sure sign of trouble. But they both look like your typical flipper who flopped, nothing like a real house coming into the market at a reasonable price…."