In the city after city, the story is the same. The story starts back in 2002, with a massive cut in interest rates prompt an undeserved rise in house prices. With increased housing demand comes a construction boom, and speculators taking a bet on house prices rising further.

It is now spring 2007 and the story is reaching a sorry conclusion; interest rates are up , speculators have long ago disappeared, the construction boom is replaced with recession, and prices are crashing. Everywhere, there is oversupply in the housing market.

However, it is dangerous to think that it is safe to return to the housing market, as this story from Tucson Arizona warns:

(Arizona Daily Star) Tempted by a generous price cut, Cynthia Saenz couldn't resist buying a new house in Vail about eight months ago. But after reaping benefits on the buyers' side of the market, Saenz is languishing on the sellers' side. She put her Southeast Side house up for sale five months ago and has reduced the 1,800-square-foot home's price from $230,000 to $200,000. Still, it hasn't sold. Saenz's house is among a record number of properties on the market in the Tucson area.

An explosion of home-building and numerous condo conversions during the boom of a few years ago have led to an unprecedented glut of homes now that the market has cooled, according to real estate executives and industry analysts. Investors who helped propel the boom are dumping properties and going elsewhere, they said. Many homes are being sold only with the help of price reductions and incentives.

Several industry observers predict the market will pick up within a year. But their hopes all hinge on whether the overabundance of homes can be reduced.