I've spoken to a number of people over the past few years who've convinced themselves that the housing bubble is really only something that is going on in California and the increase in their home price is real permanent wealth. Such a fallacy is perfectly understandable emotionally, but its bad business. Here are some graphs of the regions of the country that are most impacted by the "sub prime" forclosure problem. Do you live in one of the darkly colored areas? If so, lots of people in your area can't afford to pay their mortgages. That means housing prices in your area are going to go down. Most of the Americans on MemeStreams that I know live in such an area.

The Big Picture | Brief Foreclosure History & Mortgage Delinquency Maps