Readers suggested a topic on where the housing bust is headed. "Now that we may finally be heading into an economy-wide recession, will it become difficult for borrowers with good credit and a down payment to buy even if housing prices drop to affordable levels? In NYC and places like it, where land constraints limited overbuilding, affordable housing will attract occupants. But in places where supply boomed (or population is falling) prices might get really, really low."

"Think of the 1940s and 1950s, when incomes were constrained and new housing boomed in the suburbs. It was possible to pay almost nothing for housing in many city and small town locations. This will raise some interesting political issues in the suburbs and exurbs. You'll have less well off people able to live where less well off people were zoned out previously."

A reply. "This happened in the last SoCal bust. I personally knew a number of ordinary engineers who were able to buy houses in Palos Verdes and Manhattan Beach without stretching too hard in the mid 1990s."

One observed, "In the town of Bakersfield, I have been purchasing my house for 16 years, and the neighborhood is changing. All the homes have at least 4 bedrooms. I live in a cul-de-sac with only 6 homes, and two of them have lots of tenants (mostly field workers) and one is in foreclosure with squatters in it."

"The neighbor across the street is trying to sell his home, it was put up for sale last week. I really feel sorry for him if he decides to leave it empty and move before it sells. The town is slowing down, you can see it all around."

Another point, "The pace of sales has been seen to rapidly increase during stock market sell offs. I submit that increasing sales and accelerating price declines can go hand-in-hand under certain market conditions."

One replied, "Couldn't that happen if potential sellers finally realize bubble prices aren't coming back and all head for the exits at the same time? You still need buyers to make this happen. How many would buy into a sharply declining market and would have the means to do so if so inclined?"

Another answered, "There are always buyers in a sharply declining market. They get a house for 15% below asking price and they thing they got a steal."

"How quickly they find out that the 15% cushion of so called equity can evaporate in a heartbeat. They also remember that the house they just bought for 250k that they think is 15% below market once sold for 500k. They pull rib cage muscles from patting themselves on the back."

The New York Times. "The euphoria is past. The era of rampant house flipping is gone. What was once a seemingly unstoppable climb in home prices has given way to a plunge in value in many areas. Yet, there is a bit of good news: This might be the right time to find a bargain, especially for buyers approaching their retirement years who can afford to take their time."

"Of course, anyone looking to buy can also find good reasons to take a wait-and-see attitude, like the fact that good deals may not exist in every location, and no one really knows if prices will continue to decline."

"'It's like missing the top of the market - it's the same thing with the bottom,' said Maurice Veissi, president of Veissi and Associates in Miami."

"Franke Watson II, a 69-year-old retiree from New Orleans, purchased a home in Prescott, Ariz., in February for more than $100,000 below its initial list price."

"'The house had originally been listed for $430,000,' he said. 'When I looked at it, it was $349,000. I offered them $300,000 and we finally settled at $309,000.'"

"When he relocated to Prescott last July he decided to rent at first rather than buy. 'I didn't think the real estate market was where I wanted it to be,' he explained. He finally purchased a three-bedroom brick ranch once prices came down to what he expected to pay."

"Mercedes Gutierrez and her husband are looking for a second home where they will eventually retire. They currently live with their 9-year-old daughter in Cooper City, Fla., but would like to buy a home in the Keys to use as a weekend getaway until Mr. Gutierrez retires in a few years."

"But so far, prices haven’t fallen into the $500,000 to $520,000 range they hope to pay for a three-bedroom home on the ocean side of the Keys — ideally on a canal, since Mr. Gutierrez plans to spend some of his free time fishing."

"'We’ve found a few things, but at the same time we’re not in a hurry because we have time on our side,' Ms. Gutierrez said. 'We’re playing the waiting game to see how much people will drop their prices.'"

From Business Week. "When home values fall low enough, hard-pressed homeowners become less able or less willing to keep paying their mortgages. That forces lenders to repossess homes and then dump them back on the market at fire-sale prices, which depresses prices further and leads to even more foreclosures. That process has already started in parts of Arizona, California, Florida, and Nevada."

"The drop in those markets 'is being fueled with jet fuel,' says James L. Smith, executive VP for portfolio services at Fiserv."

"His unit works with borrowers to restructure delinquent mortgage loans. Smith worries that instead of settling at a reasonable price level, 'we're going to blow past [it] without even looking back.'"

"Some economists and politicians say that the effects of the housing bust will be modest and that low prices will attract new buyers. 'We're seeing people go into the market that weren't there before,' says Alfred A. DelliBovi, president of the Federal Home Loan Bank of New York."

"Still, the housing optimists have systematically misjudged the market. Some became convinced that the huge runup was justified by fundamentals such as population growth, rising incomes, and land scarcity. And because sharp national housing price declines are so rare in U.S. history, analysts assumed that prices would, at worst, flatten out for a few years."

"What they forgot was that markets can overshoot on the downside just as easily as on the upside, with both financial and psychological forces feeding the decline."

"Naturally, this state of affairs is working out for buyers with ready down payments, such as George Farraye, (who) just paid $359,000 for a 3,500-square-foot house in Murrieta, Calif., that sold for $630,000 in 2006. Farraye says tighter lending standards 'shook out all the riffraff.'"

"At the same time, the fall in house prices is so precipitous that it is changing homeowner psychology, eroding the long-held taboo against walking away from a home. In hard-hit markets such as Las Vegas and Phoenix, many homeowners are beginning to conclude that their home purchase comes with a 'put option'-the right to hand the keys back to the lender if things don't work out."

"Fiserv's Smith, whose unit began handling loan modifications for Countrywide Home Loans in May, attributes the rise in walkaways to 'the ticked-off factor.' Even homeowners with high credit scores feel cheated that they're paying more than they can afford for a house that is worth far less than the debt on it, he says."

"Steve Hawks, owner of (a) real estate agency in Henderson, Nev., says he has been flooded with calls from people interested in 'buying and bailing'-that is, buying an additional house while their credit is still good, then walking away from the old one unless they can cut a favorable deal with the lender."

"Kim, a Las Vegas bartender, says she and her husband are about to purchase another house in Las Vegas, move into it, and then try to get the lender on their old house to erase their mortgage for whatever they manage to sell the place for-a so-called short sale."

"Says Kim: 'I'm going to lose the house no matter what. I just want to make sure my family's set, taken care of.'"