Readers suggested a topic on who is buying. "I propose the following weekend topic: With all the bad news from the housing market, you’d have to be an idiot to buy now, right? Yet people are still buying. Are they deluded homeowners, or knife-catching 'vulture investors' who are going to be creamed when prices crater? If you know of a friend or rellie who made the mistake of purchasing recently, ask them 'what were they thinking?' and post the results back here. I’d be interested in reading about the buyer psychology."

One replied, "My new (Maine) landlord closed on this house just a month ago. He is a retiring Federal employee, maybe he got a lump-sum distribution. He thinks he got a good deal here, because the price he paid is 30% below the original 2005 asking price of $650K. Shorefront, 2000+ s.f."

"When he told me he had done very well with the purchase, I 'yessed' him - why ask for trouble? I am paying him $1,000 a month to rent his $450,000 alligator, and during the winter, when I am not here, the young couple of housemates with local parents will pay me $420/mo, most of which will go on heat."

"You might say that it is I who am spending foolishly, and there is some truth in that; my point really is that the landlord is fortunate to collect even $1000/mo from a creditworthy customer. He thinks he will sell his inland NH house within a year. Stay tuned."

Another said, "I’m considering buying soon. In central Aarkansas, we tend to lag national trends. The bubble lagged and the burst seems to be lagging."

"I want to get out of the neighborhood scene, get some more room in the house, get a piece of land (5 acres? 25 acres?). So, is now a good time to buy? Probably not the best."

"I expect to buy some time next year. I figure something in the neighborhood of 170k, I should be able to get a decent house with a couple acres for that. I am also not in a hurry at all, so I expect to make a purchase that is a 'good deal' at the time of the purchase. Of course, a 'good deal' now is just 'fair market' in six months. If I lived in a huge bubble area, I wouldn’t consider it."

One looked back, "They are thinking in exactly the same way investors in the tech bubble thought. That is, 'It can’t drop much more can it?'"

"Only if you have been through (and experienced the financial pain) of a bubble bursting, do you NOT reach out and catch a falling knife. Almost all who were invested in the tech bubble had very little experience with the stock market (myself being one of them) and thought the prices would bounce back. I myself was invested very heavily in the QQQQ’s (then the QQQ’s)."

"As it happens, I was away in europe and I got out of the market before I left because I couldn’t watch it on a daily basis. As in the property bubble, the buying and selling was fast and furious at the height. Bubbles are ALWAYS the same. I was following an 'expert' who advised his news letter subscribers to buy the QQQQ’s (long) at $84.00. They had already dropped from $120.00 at that point and the newsletter said they were a bargain. (Gee, where have I heard that before?)."

"However, and here’s the lesson and the irony, when I got back from europe, the QQQQ’s had dropped to $65.00! I read the newsletter and he had made no mention to his readers that they should sell. 'Wow!,' I thought, 'How can I go wrong!?' I plowed big bucks into the QQQQ’s at $63.00, thinking, 'If an expert like him thought the QQQQ’s were a bargain at $85.00, what must they be at $64.00!'"

"Well folks, what is going to happen with property is what happened with the QQQ’s. I and others (the mirror images of todays FB’s and speculators ) hung in. It had to bounce back. Right? Wrong. Thousands of 'hot companies' tanked and many went bust. Just like some of the builders, banks and realtors and brokers are going to go bust."

"Where I was concerned, the QQQQ’s dropped to $55.00. (That’s okay they will bounce back soon). Then $45.00. (That’s okay they will bounce back soon). Then $35.00. (That’s okay they will bounce back soon). Then $25.00. (Jeez, I wish I’d sold at $60.00 but it’s okay they will bounce back soon)."

"Of course there were the odd mini-rallies as the 'falling knife catchers' jumped in and bought but the bubble continued to deflate. As it always does until capitulation day arrives. The QQQ’s finally hit a $20.00 low after falling from $120.00."

"THAT is exactly what is going to happen to property values. Other forces could come into play which might affect, one way or the other, the eventual outcome. However, it will make no difference. This problem is worldwide. I fully expect prices to drop at least 50% from the highs. Possibly much more. A property worth $700,000 at the height will drop to $350,000. THAT is the path ALL bubbles have taken. I’ve now read volumes on the outcome of bubbles and it’s amazing how the pattern repeats time and time again for hundreds of years."

"THUS: Now is NOT a good time to buy. Now is a good time to sell if you own property."

A response, "The amazing part (IMO) is how predictable this is, yet how unbelievable it seems while it plays out."

The Economist. "The S&P/Case-Shiller national index, the best gauge of American house prices, peaked last year after rising by 134% in the previous decade. France, Sweden and Denmark have all had booms of similar size."

"In Britain, Australia, Spain and Ireland, the ten-year increase in house prices has been even larger. If America is staring at a nasty housing crash, what does this say about the fate of frothy markets elsewhere?"

"What sets America apart is the time-bomb laid by subprime mortgage lending in the late stages of the housing boom...In short, dangerously loose lending standards fuelled America's housing boom and now the fallout from increasing defaults is exacerbating the bust."

"The Federal Deposit Insurance Corp reckons over 1.5m households will eventually be unable to meet their mortgage payments. Prices are falling and more forced sales will add to the already swollen stocks of unsold homes."

"What might this presage for Europe's overpriced markets? Robert Shiller, a seasoned bubble-hunter at Yale University, has stressed the role of news reporting in influencing price expectations. If America's slump deepens, it might trigger a reassessment in Europe's property hotspots, particularly as tighter credit markets start to price out the more speculative investor."

"No one knows for sure how markets in Europe might respond to events in America. But one thing is certain: when it comes to asset bubbles, bigger is not better."