I have not been quite as pessimistic about the near-term for the US economy as many writers, but this statistic is disturbing:
One in every 464 U.S. households -- 272,171 U.S. properties -- received a foreclosure filing, got a default notice, was warned of a pending auction or were foreclosed on during the month of July. That represents an 8% increase from the previous month, and a 55% increase year over year.
Falling prices are putting more homeowners equity underwater, and is accelerating the housing decline.
The houses are still there, so there has been little loss of wealth (aside from deterioration from lack of maintenance by foreclosed owners). But the foreclosure and transfer process is neither immediate nor costless, and this is where much of the problem will lie. When houses are idle, housing services are not being produced. And when labour and capital are used to foreclose, they are not available to produce other products.
I expect not all will agree with me, but it is these supply shocks that result from the housing crash that really concern me.