"We do have an imbalance. Right now we have a supply that's greater than demand. And that's an issue in economics, and it means that things will have to happen to bring supply and demand back in equilibrium," says Walden, a professor of agricultural and resource economics.

"On the supply side, what we need to have happen is either we have to have prices moderate in some cases (and) in some markets we are going to have to have prices of houses decline. We are also going to have to have reductions in new construction. And all those things are occurring," he adds.

"Then on the demand side we need to have buyers to come back, and I think they will come back as they see prices moderate or in some markets again decline and also - and this is where public policy comes into play - as the Fed perhaps lowers interest rates even more.

"Now this process has to go on on its own. There's not much the government can do other than lowering interest rates and perhaps helping some homeowners with refinancing problem loans. Most economists think this process is going on, will continue to go on. It won't be about until the middle of next year, 2008, that we may be back into balance in the housing market."