That is the prices here.
$350k is a small starter house.
$300k is a townhouse.
$200k is a double wide trailer.
There IS no "cheaper houses", unless you want something that is falling over.
The prices have to fall back to where wages can support home buying, since the wages have not really gone up in eight years...only home prices. I agree there. But there is no "Don't buy a $350k house" here. It's just "Don't buy a house"!
Maned, how much is rent for a typically-sized 3br 2ba house?
Is rent in line with a real estate investor paying $350K for that house? Like $2500?
If not and property investors want to liquidate holdings, they'll have to sell lower. They'll still make a profit selling at $300, $275, $250, $225, until the market levels off. That's because they bought 10+ years ago at $125.
Happened here in AZ already, I'm sure it will happen eventually in your neck o' the woods too.