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.
In western Massachusetts many have mortgaged their houses beyond the properties ability to secure the loan. Many older homes are for sale, prices haven’t slipped yet, but houses are not moving. There is still new construction going on, but that has slowed some.
“But the media tell us”
The media has been criminal in their reporting of the real problems. The problem is that supply and demand were thrown out the window by a combination of factors in this housing ponzi scheme driven by such factors as liars loans, mortgage fruad schemes, corrupt appraisers, and homeowners using their equity like it was a cash machine.
This fueled a massive artifical demand of house building.
Its going to take years for all this crap to be worked out of the system and the government isn’t helping by all these bailout and economic stimulus package schemes to keep the ponzi scheme proped up. Housing prices have started to correct in the bubble markets, but there is plenty of markets that are easily 20 to 30% or more overvalued, but will take much longer to correct because the local economies are somewhat stable. But they will correct. We are just in the early stages of this.