59% of polled economists say there is no national housing bubble, only significant local bubbles. Another 8% say there’s no bubble at all and that the market is functioning correctly.
There are some local bubbles where there were hundreds and thousands of development parcels and homes developed and built in anticipation of future sales and the sales that were feeding that demand was investor speculation.
In late 2005 and through 2006 the investors realized that the boom was being fed by their own demand so withdrew. This left tremendous inventory in some cities or areas of cities.
Unfortunately, in 2006 this was immediately followed by the secondary market lenders realizing that they had allowed a foolish combination of underwriting standards for the previous five years or so. They were buying loans that allowed buyers to have both, little or no down payment and marginal credit.
The result was in some communities around the country, many of these mortgages were used to purchase homes. That created additional pockets of excess inventory which stalled prices in those areas.
Most of the country is experiencing a normal buyer’s market that normally follows a long healthy seller’s market.
The market is functioning correctly.
In 1986 after about three years of a soft buyer’s market not unlike what we are experiencing now (although it was driven by different causes) there was a long strong period of a healthy seller’s market with steady appreciation.
There was a short term softer buyer’s market around the Gulf War in 1991 (although not caused by it) followed by over a decade of a healthy buyers market that lasted until 2006.
If we learn from history: strong seller’s markets last longer than softer buyer’s markets.
REALTORs® all learned in their first Real Estate class that the market is driven by supply and demand.
So as long as there is an increasing population of people with reasonable or better incomes, the demand will keep the market healthy.

Most Homeowners who purchased properties with 10% or less down and anytime after 2004 are probably upside down at this time. The amount of Foreclosures across the country may not subside for quite some time. Lenders DO NOT want all of these properties back. It is typically in the best interest of the Homeowner and the Lender to negotiate the Short Pay Sale and keep the property out of the REO department.

I was just researching sales in Jackson County and Medford in particular. 

For the past six months, we have averaged about 150 residential sales per month in the county.

In Medford, there were 73 homes sold in July with an average sales price of $229,000.