The second reason is that, Mr. Yun notwithstanding, most people simply do not believe that housing prices are even close to hitting bottom. “In the Bay Area, a house that was worth $300,000 a decade ago became a million-dollar home,” said Greg Fielding, a real estate broker and blogger. “Now it is listed at $800,000.” That price, he suggested, was still unrealistically high.

Can we really blame the drop all on the loss of the tax-credit? Or are the tax credits simply a convenient scapegoat, distracting us from greater economic forces at play?

I would argue that many of the people who think that now is the time to invest in the lower-end simply haven’t spent much time there. If they did, they would know that most of the residents are just barely hanging on.

The combination of expiring tax credits, the failure of HAMP, the conclusion of the Fed buying dodgy MBS, the growing shadow inventory of foreclosures, Option ARM and Alt-A resets, and rising interest rates will result in a further fall in home prices of at least 20% in the next two years.

It’s been one hell of a non-recovery in housing, smack in the face of now-expiring $8,000 home tax credits that have proven to be as stimulative and futile as attacking fire ants with a BB-Gun.