Understanding the Housing Bubble

Put a frog in a pot of boiling water, it will jump out immediately.
But put a frog in a cool pot of water and heat it slowly, the frog will stay put until it dies.

Right now, housing prices are beginning to fall. Relative to where the prices were last year, these new prices look great.
But relative to where they were 4 years ago, these prices are still boiling hot.

My point is that housing prices feel ok even at the recent reduced prices, and that's because the market got overheated gradually. When things cool down, they will need to drop a lot more - to about 2002 prices.