Real estate prices have fallen across the United States, and most rapidly in the location that were the parts of the real estate bubble going up the most rapidly in the last five years, such as Florida, Arizona, and the Boston, Mass. area. Still, some areas must be better opportunities for new buyers. After all the question remains, has the bubble gone down far enough, or does it still have a lot more to go. In any case, you have to live someplace, so you may be likely to buy a house or apartment somewhere anyway. If you live in some areas, like much of upstate New York, there may never have been much of a real estate bubble to worry about in any case.

On the other hand, on the Jersey Shore, and in suburban New Jersey's Bergen and Passaic County, near New York City, a real estate bubble has definitely been built. For example, on the Jersey Shore (New Jersey), not far from New York City, the foreclosure rate on homes is climbing in some fairly ritzy neighborhoods. The foreclosure rate has doubled both there, and in nearby Bergen and Passaic counties.

Some sub-prime mortgage lenders sound weak and some are actually closing up shop. This is becoming a major financial development. H&R Block, the famous tax accountant firm, took a loss of about $135 million mostly from losses in their mortgage subsidiary. Option One Mortgage, and its sub-prime unit have been taking a big hit.

Of course, if you just look at this from the standpoint of the real estate market, it doesn't seem that big a deal. Instead of panicking, there will just be real estate brokers who go heavier into the foreclosure and distressed home market. It will seem to be a novelty to them to sell distressed homes, to try to buy them at the lowest prices and resell them quickly at higher prices. Over the last five years, the foreclosure rate on homes was very low, because if a homeowner fell behind in their mortgage, they could either refinance the home at a higher price than they paid and get some quick cash out, or sell the home quickly at a higher price than their mortgage, but not anymore.

If you look at reports of the involvement of the entire U.S. banking system in the financial bubble you get a different story. Since the average bank has about 50 percent of its equity tied up home and commercial mortgages. A big hole in this equity could really start the financial system going down.