The article in today's paper on the continuing collapse of the housing market never mentions the bubble. It is impossible to make any sense of the flood of foreclosures and the price declines without noting the bubble. In some metropolitan areas, like Atlanta, Cleveland, and Detroit, there is no bubble and no reason that prices need to continue to fall. On the other hand, in markets like Los Angeles, Miami, and San Diego, and Washington, the bubble is still in the process of deflating.
Housing policy can help to shore up prices in the depressed markets like Cleveland and Detroit. It is not plausible to imagine that housing policy can sustain prices in the bubble-inflated markets. Not is it obvious that it would be desirable to sustain these bubble-inflated prices since it would mean that new people moving into the area or forming their own households would find homeownership unaffordable.
It would have been useful if the article had made the distinction between these markets.
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