This isn’t a slump. Its been caused by a massive overbuild of housing. And now states like California, Nevada, Arizona, and Florida are sitting on inventories that will take many years to work out.
By "overbuild" I assume you mean that too many houses have been built. But the media tell us that it is the ARMs coming due and the borrowers can't make the mortgage payments that constitute the problem. If there was an over supply of housing then the housing prices should fall. That is not what is happening. Prices are sky high, so high that the average middle class family is being priced out of the market. Thus the market is starting to experience a slow down and some prices are starting to fall.
Trouble is a lot of people have borrowed aganst their equity at the high price and in some parts of the country those home prices aren't holding. It seems to me that various regions of the country are experiencing different types of problems though; like the states you mentioned.