Looking at the NYT map Yglesias links to, the blame for the foreclosure mess lies mainly with just a few states. I'm not shocked. At the height of the boom, home prices in Kings County were approaching $500K. No offense top anyone there - I grew up there and have an affinity for the people and places there - but if you've ever been, then you know that you may as well be in rural Iowa. And that's why homes were significantly cheaper there until the boom. Nothing happened to justify a rise in prices, except that they were located in the state of California. An earthquake didn't suddenly make Avenal oceanfront property. Coastal California has an easy justification for price insanity. The Central Valley, Inland Empire, Imperial Valley, etc, do not. This didn't seem to happen elsewhere, as Californians were constantly hearing these fables about how much land you could buy in Texas for the price of a townhouse in Lemoore.
Personally, I blame Trading Spaces. Genavieve and Vern made everyone want to get a house they could redecorate. Frank probably deserves a medal for keeping people in check with his abominations.
Not that I watched or anything.
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