I missed this post when it came out, but caught it via DeLong. Paul Krugman illustrated the coastal housing bubble in pictures. It's sobering. I'd guess MN's prices were between Michigan and Florida -- so only a mild bubble here. We knowingly bought at the peak of the bubble and figured we were going to lose 10% of value within 1-2 years, that's about what happened.
So bad news for the economy, but on the other hand folks I know who follow housing are thinking "post-bubble investing opportunity". There's an unbelievable amount of money sloshing around America looking for a home -- if it pours into housing now we might see an unprecedented recovery as well. (That's easy for me to say, because I'm not predicting anything and don't have time to put my money anywhere anyway!)