By the way, there's no bubble where I am now. We took our equity and paid cash for a home in another state: New 3 br 2 ba - $129,000. California housing prices are insane and unsustainable - no other word to describe it. It's so crowded there, it is no longer even a nice place to live. They can have their rat race, and inaffordable housing and gay marriage. Color me gone!
I agree that in certain regions there is definitely a bubble; however, unlike the stock market, real estate bubbles have always been regional. I know that where I live, every projection is that it will be at least five more years before there is enough housing to meet demand; the saturation point and whether or not the homes are primary residences has more to do with it than most other factors, places like Florida will probably get hit hard because in many cases the run-up has been in condos used as second homes, many people will be willing to cut there losses and sell. But in areas where people work and the average home is still affordable to the average resident, there is not alot to worry about.
Even the times when there have been nationwide dips in real estate, it has always been a relatively small percentage and it has always come back. When the Nasdaq collapsed, many people wound up holding worthless stock in companies that no longer existed, that is simply not the case with real estate.