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There is an interesting article in the New York Times discussing if real estate is a local or national phenomenon. One of the things that I have previously noticed but have never seen elsewhere is that the housing bubble is closely tied to the political voting patterns of the local areas.

Where there has typically been the biggest run up of housing prices and now facing significant declines vote Democratic. Where the housing inventory has remained fairly stable, the population leans Republican. Makes one think with the upcoming elections.

An evolving credit culture has also helped forge a national housing market. “Instead of getting mortgages from local banks, as they did 20 years ago, people all over the country get mortgages from capital markets,” said Mark Zandi, chief economist at Moody’s Economy.com. That means that access to credit and interest rates don’t vary much across the country.
Yet in many ways the market remains intensely local. Last month, Economy.com issued a report that examined the prospects for housing in 379 metropolitan markets. Over all, the consulting firm expects home prices to fall by a small increment in 2007. But there’s wide variation.
“About 100 of the 379 metro areas will experience some kind of measurable price decline, and they together make up about half the nation’s housing stock,” Mr. Zandi said.
On a map, areas most at risk for short-term pain look like a Democratic fund-raiser’s view of the country: Northern and Southern California, the Northeast and most of Florida. Meanwhile, in the remaining 279 metropolitan areas constituting most of the rest of the housing stock, prices should remain flat or rise. It’s a tale of two groups of cities.

All Housing Markets Are Local, Except When They’re Not - New York Times.

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3. Housing sales fall in 40 states in fourth quarter, Thank God!
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